Intro:
Small Business Pricing Tips: 5 ways to convince customers your higher prices are worth it

If you’re not more expensive than your competition, you may be missing a profitable opportunity to establish your reputation for higher quality and better service!

Gary Gebenlian, VP of Marketing at FutureSimple, provides some overlooked common sense in this Small Business Pricing Tip. It’s seldom honorable (or smart) to be the cheapest in your small business industry. In this Small Business Pricing Tip, learn the value of turning your higher prices into a marketing asset for your small business. The method and manner in which you present your pricing is more of a determining factor than your actual prices. Please Leave a Reply in the comment field at the bottom of this page. We welcome your feedback!

Small Business Pricing Tips:
5 Ways to Win on Price

It’s a scenario that’s all too familiar: You’re working to win business with a great new prospective client, and your sales prospecting courtship is off to a great start. But you’ve just started the whole discussion around price, and it’s starting to feel like the conversation is heading south. You know your prices are higher than your competitors’, but you’re not having much luck justifying it to your prospective client.

It’s no surprise that pricing is such a big decision driver in all realms of business. In fact, it may be the most important of marketing’s four P’s (the others being Product, Promotion and Place). But rather than hiding behind your pricing, here are five ways to turn pricing into a positive lever to help you win business:

1. Focus on Value

Value = Benefit/Price. Rather than focus on the actual price point like most businesses do, expand the pie. Focus on emphasizing the benefits of your product or service and ultimately demonstrate the value you’ll be creating for your customer.

2. Connect the Dots to Dollars and Cents

Value isn’t a fuzzy thing – it’s measured in dollars and cents. Each feature you provide ought to either increase revenue or decrease costs for your customer. So rattling off a list of features your product or service offers isn’t going to resonate with your prospect. Instead, you need to connect the dots between features, benefits and value in dollars and cents. For example, if a feature you offer is complementary logo design services, the benefit to your customer is that they will save six hours of time instead of doing it themselves, which might be worth 6 hours multiplied by $50/hour in average designer wage = $300 of value.

3. Get the Pricing Metric Right

A good pricing metric should track with the value delivered and should be easy to measure. For example, your software product might be better priced based on hours of usage vs. a fixed price per seat. A pharmaceutical example would be pricing treatment medication per minute of therapy vs. pricing per volume of medication (since administering to children may be higher value and higher cost).

4. Tier Your Offerings

A one-size-fits-all approach doesn’t work well in marketing. It also doesn’t work well in pricing. Your customers have different needs, so give them different options. For example, offer an entry-level option that comes with limited support, online ordering only and shorter net payment terms.

5. Build Fences

Your different customer segments perceive value differently. Tiering your offerings using variations will naturally fence off your customer segments. For example, airlines fence off business travelers through the Saturday-night-stay requirement (and charge them a higher price).

Pricing is much more than setting a single price point. Think about pricing in a strategic way, and you’ll be on your way to winning more business and increasing your profits.

About the Author
Gary Gebenlian is VP of Marketing at FutureSimple and he has a passion for helping small businesses grow. FutureSimple designed PipeJump, a simple and intuitive software solution to help small businesses manage their sales and contacts.

Summary:
Small Business Pricing Tips: 5 Ways to Win on Price

As we’ve learned in this small business pricing tip, it’s not enough to simply establish your pricing structure for your small business. Careful thought, planning and analysis are all required to make your pricing structure work at its optimum for your small business. The lessons learned in this Small Business Pricing Tip show that your prices are an asset – never a liability.

Contact Us to learn how we can help your small business today. In addition to offering small business pricing tips, WebPro360 guides small business toward success online.