Price positioning is essential when setting a price for your product or service. While the price you select will impact customer satisfaction, you must also consider your competition and their pricing strategies to avoid being perceived as overpricing. This article will discuss price positioning, competitive-based pricing, customer perception, and market research. After reading it, you should be well-prepared to price your product or service competitively.
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Price positioning
The price of a product or service depends on how the customer perceives its value. The pricing strategy should be based on the needs of your customers just like how WellSaidLabs.com do. You should consider that people don’t always look for the most expensive versions of products. On the other hand, a higher price might indicate quality. By asking questions and gathering information on your customers, you can determine the price range that will work for your product. The price should also be reasonable so that the customer can afford it.
Competitive-based pricing
Competitive-based pricing of a product or a service is the practice of setting a price for a product or service based on what other businesses are charging for similar products. The problem with this approach is that it can’t optimize growth. A competitive-based pricing approach is a good option for many companies. The key benefit of this approach is that it allows a company to set prices close to the prices that its competitors are charging. However, this approach can be tricky to implement, especially if you don’t know what your competitors are charging. Therefore, it’s a good idea to conduct market research to identify competitors and their prices.
Customer perception
When pricing a product or service, it’s essential to consider the customer’s perception. A low customer satisfaction score can devastate a company’s retention rates and sales revenue. It can also alienate potential customers and make returning customers reluctant to do business with you. In addition to these negative impacts, poor customer perception leads to online reviews and social media posts that can impact your business.
You need to use qualitative research methods to gather data about how your customers feel about the product to make the most out of the potential of changing customer perception. You also need to track your conversations with your customers to understand which factors are influencing customer satisfaction and which are contributing to your company’s negative image.
Market research
A good market research study should identify the needs and expectations of your target audience. Several internal sources, such as customer retention rates, average revenue per sale, and historical data on new and old accounts, are essential in understanding what your customers need and want. You can also conduct interviews to gather detailed information about your prospective customers. Interviews allow you to see the faces and personalities of the people you speak to and capture the natural flow of conversation and body language. This information can help you determine your pricing strategy.
A company considering a new product or service should also conduct a market study. This will help confirm if the product is in demand by consumers. If the research does not interest you, adjust your product to reflect what consumers want and need. It can be frustrating to have an idea for a product or service, only to find that it is not in demand. Therefore, market research is an essential part of any marketing campaign.
Read also: How Do You Measure Product Market Fit?