But because value cannot be defined absolutely with surgical precision, different customers with a similar perceived value of what you are offering will have different degrees of price sensitivity. In other words, just like value, an 'acceptable' price cannot be precisely defined either. Your various customers will have a 'price band' in mind and if your price falls anywhere within this band, they will be able to agree to purchase, all other things being satisfactory.
“Just like value, an 'acceptable' price cannot be precisely
defined either”
This band in its turn is not fixed and inflexible either, but will be determined in large part by their current perception of value. A price not outrageously beyond the band may enable the customer to re-evaluate your proposition, but of course a price significantly below it can have the same impetus, causing the customer to wonder if they have over estimated the value.
If you are serving a market where people spend someone else's money on themselves, recognise their minimal incentive to economise and seize the opportunity to charge higher prices.
When you tailor your various value propositions to different customer groups, you are in a position to reserve capacity for your best customers. Your goal must be to maximise your profits, not necessarily to fill your capacity.
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
No comments:
Post a Comment