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Tactics for Pricing Your Products and Services

Most business owners struggle with how to set the ideal price for their products and services. Here are a few tactics that have been proven to be successful in influencing sales.

To learn more and teach others how to set the ideal price for maximum profit, check out our 'done-for-you', customizable course:

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Tactics for Pricing Your Products and Services

  1. 1. Pricing Tactics That can be used to influence buyer behavior and sales:
  2. 2. Discounting Offering specially reduced prices can drive sales very effectively. You can offer a clearance discount to move products, encourage multiple purchases of similar items with discounts, or offer discounts for bulk orders. If you offer too many discounts your customers may come to see your full-rate pricing as expensive. Constant discounting can also backfire by decreasing your products' value in the eyes of your customers. Pricing Tactic #1
  3. 3. Freemiums The freemium model is especially common for digital products like software, content, apps, games, web services or memberships. It offers a free version of the digital product and also a premium version that has more features. You can also offer a free digital product that then advertises other premium products. Customers can get a taste of the value the product offers firsthand with the free version, leading them to purchase the premium version. Pricing Tactic #2
  4. 4. Bundling Bundling involves selling a package of goods or services together at a lower price than they'd be if bought individually. Bundling is what's happening when you buy a set menu item at a fast food restaurant. It's also used by car dealers who sell special options or mobile phone calling plans. Bundling is a type of discount that doesn't negatively affect your customers' perception of your products' value. Pricing Tactic #3
  5. 5. High-Low Pricing A company positions its products as higher quality or higher value than those of competitors, and charges a higher price accordingly. To bring in new customers and introduce them to this superior value, they offer occasional promotions, advertisements or coupons that sell the product for a lower price for a limited time. Customers buy the lower-priced product, realize its superiority over similar products by competitors and become loyal buyers of the company's higher priced offering. Pricing Tactic #4
  6. 6. Decoy The decoy method offers a handful of similar products at different price points. One or two of the products are "decoys." They are priced high and the company doesn't expect to sell them in high volumes. Rather, their high price offsets the lower price of the target product. It appears cheaper than it really is to the customer when compared to the higher priced items. This allows companies to sell their products at a "lower price" without actually lowering the price. Pricing Tactic #5
  7. 7. Odd Value Pricing This is a classic pricing strategy where companies choose an odd price such as $19.99 rather than $20 because it looks like a lower price. While it seems obvious that one cent is an insignificant difference, companies have used odd value pricing for a very long time because it works. Pricing Tactic #6
  8. 8. Anchoring Anchoring means setting a price as a benchmark which then re-sets the customer's perception of its value and appropriate price. The customer sees this "anchor" price first, and it sets their expectations. An example of anchoring is Starbucks charging $3 for a cup of black coffee. If customers are used to the anchor price of $3, a coffee shop can position itself as the anti-Starbucks (a local place, etc.) and charge $2 per cup. Or, a coffee shop can stress its higher-quality beans and charge $3.50. Pricing Tactic #7
  9. 9. Profitable Pricing Learn More...