In any business, pricing is one of the most complex areas to master. There’s a lot of science that go through it. The problem is, many startups aren’t sold that it’s really complicated. But, that’s just one rookie mistake. It’s not uncommon for new players to take their pricing strategy lightly, and only realized they’ve been doing it all wrong all along.
If you believe in any of these ideas, thrash them now before you do when it’s too late.
Tracking Prices is Fruitless
Seeing your competitors only as rivals is a cardinal sin. There are plenty of things they could teach you, especially the more successful ones, which might actually generate you a surplus of revenue.
Basing your own pricing on others’ is intuitive, but following pricing trends matters more. A smart competitor price monitoring tool would give you empirical data where your decisions could center around.
Increasing Your Pricing Means Losing Some Businesses
Not necessarily. While it’s never comfortable to have price increase conversations with customers, such changes are sometimes necessary, especially when you’re adding more features to your products and services.
You must be ready to reasonably justify your increase in pricing and stay firm. You may inevitably lose some customers, but your losses may be greater in the long run if you give in to their demands and not hold your ground.
Investing In Price Analytics Is Off the Table If Your Business Is Down
It may seem silly to spend more when you’re already struggling to make money, but a price analytics investment could be your saving grace. It’s dead hard to identify your areas of improvement without the use of innovative tools.
Besides, you have a variety of options to choose from. If you do your due diligence, you could find a cost-effective solution to your pricing woes.
Wrong pricing could limit your profit potential, or worse, bring down your business completely. Unless you change the way you look at this important business aspect, you might never hit the mark.