Price Setting IS a Thought Process
Episode 59 | Live with the Pricing Lady (Thursdays 15.00 CET)
Price setting is a thought process not a mathematical calculation.
Often when people ask me how they should know what to charge they expect me to give them a formula to make the calculation. Price setting isn't as simple as that.
Companies that treat it as a math problem are missing one of the most important rules of pricing:
Pricing is rooted in a deep understanding of the customer and what they value.
When you understand that you realize that a mathematical equation can't possibly incorporate the customer. Or for that matter the competitive environment. Which means in order to set the best prices for your business you have to start setting your prices in a different way - by using a solid thought process that enables you to consider all the aspects that should drive your prices.
In this episode of Live with the Pricing Lady, I dispel some of the myths around price setting and share with you the formula I use with clients (hint: it's a thought process people). The great thing about the thought process is it applies to just about any type of business. Meaning that you can apply it too.
Here are the key messages.
- 0:28 Introducing today's topic Pricing Thought Process
- 1:26 Dispelling some myths
- 2:32 Who does the Pricing Thought Process work for
- 4:02 Step 1: Customers
- 5:26 The sound cuts out (starts again at 6:37)
- 9:12 Step 2: Offers
- 10:48 Step 3: Economic value
- 11:45 Step 4: Marketplace check
- 12:15 Step 5: Cost & Profit check
Live shows occasionally come with unexpected technical problems. I think there was a power disruption and hence the troubles. Skip two parts from 5:26 to 6:37 (there's no sound) and 7:29-9:12 (there's sound but I'm messing around with equipment because I don't know if you can hear me).
Enjoy the episode and enjoy Pricing!
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PPS: Need help with your pricing but not sure if/how I can help. Book a Discovery Call.