Setting the Right Price

One of the ways people get to know you is by the identity you project. Your company name, the way you present yourself, your business card and brochure, where you work, and other ways you conduct your business create an image that gives your customers information about you.

Pricing is a part of your image, too. Many entrepreneurs make the mistake of underpricing. They believe that the only way to attract customers is to have the lowest possible price. But this attitude can damage your business.

First of all, when you underprice you won't be adequately compensated for your time. You must be able to make enough money to pay your bills and grow your business, or you won't be in business very long.

Ironically, underpricing can actually result in getting fewer customers, not more. Think about this from the customer's perspective. Let's say you are looking for someone to do a job for you. You contact five companies, and get prices of $4000, $2700, $2500, $2400, and $1000. Which one would you select?

Assuming that the quotes are all based on the same specifications, most people would immediately eliminate the $4000 quote as being way out of line; however, they would also be suspicious of the $1000 quote. Why is it so much less than the others? Do they use substandard materials? Are their workers less skilled? Will they do a poor job--if they do the job at all?

Price isn't the only factor people consider when making a purchase. You might choose the $2700 quote because you decide the price is reasonable, and someone from the company called you back quickly. You get a good feeling from their responsiveness, and decide they may be worth a few dollars more than the lowest bidder.

Some markets are more price sensitive than others, and there is probably a price point you can't exceed for your product or service. But coming in far below the "going rate" can be just as harmful to your business as overpricing.

Copyright Cathy Stucker. As the Idea Lady, Cathy Stucker can help you attract customers and make yourself famous with inexpensive and free marketing ideas. Get free tips, articles and more at http://www.IdeaLady.com/.

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Branding Information:

Related Articles

Jan Verhoeff: Brand Your Market
Marketing potential of any product is based on recognition and quality. Name based recognition happens with a variety of products.
Branding Yourself To Increased Profitability
Successful Realtors know the importance of branding their identities into the consciousness of the communities in which they live, like the big boys; Pepsi, McDonald's, Burger King, and other companies we know and have come to trust.Why is branding important? Think about it! When you want a soda do you buy an unknown off-brand just because it's cheap?Or, do you reach for a Coke? I'm a Pepsi guy myself, but you get my drift!And why do you do that? Because there's comfort in familiarity and you know what you're getting when you buy it.
Brand Building For Profit: The Colour Behind the Brand and Why I Wear Red Ties!
Colour is essential to building a strong brand.Many of you know my passion for wearing red ties.
Creative Branding Increases Sales Through Company Recognition
The one thing that everyone has in common is that we are all consumers; we all buy. Every day, from daily small purchases, like your morning coffee and newspaper, to big monthly or yearly purchases, like a television or a car.
Brand Strategy - Brand Identity Guru
If you could have the secret recipe and all the manufacturing facilities of Coca Cola but not the Coca Cola brand-or have its famous brand but no facilities-which would you choose? It's not a trick question. But it demonstrates the power of the brand.
No Logo? Launching A Business Without a Logo Can Sabotage You
Initial lack of customers and cash flow often causes a small business to put off designing a logo and marketing materials professionally "until [they] got a few clients" or "until [they] get started." Designing their own marketing materials when they launch their business, instead of having them professionally created, will make getting those initial clients more difficult, and may result in a business that will not succeed.
Branding Fiasco -- Better Be Who You Say You Are!
Our experience as customers offers great instruction into the concept of branding. Come with me on a recent "experience" and you'll see what I mean.
Santa - The Brand
Every Christmas Eve, a burglar named Santa busts into homes around the world, but he has never been charged with B&E. He has one of the best, most positive brands around and it continues to inoculate him against any hint of impropriety, as it has for generations.
The Brand Called You
The best brands always try to do the right thing, so that their reputations will remain unsullied. But beyond that they grow, evolve and get better with time, while maintaining their special qualities from the past.
Brand Image - Brand Identity - Brand Strategy - Brand Identity Guru
Consumers perceive and accept many brands within a certain trade group in different ways. By personifying a brand (How would you describe brand X if it were a person?) we can find out, that for instance consumers perceive brand A as a young, impulsive, lively, attractive, energetic woman full of ideas.
Power Your Word for Profit
Discovering and owning a powerful word that reflects you and your business is the true key of successful branding.Some organisations invest fortunes in this endeavour but there's nothing stopping any of us from doing the same at a fraction of the cost.
The Positioning of Success
Many businesses of today are often driven to compete striclty on price, quality, and features of their products and services.  Companies who prosper over the long term don't simply offer the best deals, the best quality, or the most impressive bells and whistles.
Logo Files: Versions Of Your Logo That You Should Own
Your logo is the most important graphic element in which you will invest for your business. You should own the logo in many file formats.
Im Just Starting, Why Do I Need a Logo Design?
Businesses eager to open often give little thought to their identity.With so much to get done, designing an appropriate logo hardly seemslike a top priority.
All About Branding
In this article i will explain how you can make your brand an succes.Corporate branding.
Wealthiest 10% of Americans Name Top Quality Brands for 8 Products in New Survey
The seventh in a continuing series of twice-yearly surveys by The American Affluence Research Center (AARC) reveals the brands considered to have the highest quality, regardless of price, by the wealthiest 10% of Americans, the 11 million households representing about half of all consumer income and spending, a third of the total US economy, and 70% of the personal wealth of Americans.Just released, the AARC report, The Luxury Market: Spring 2005 Survey of Affluent Americans, shows the affluent named Rolex, Cartier, and Tag Heuer as the top three brands for quality, regardless of price, for lady's fine watches.
Branding Article: Pepsis Missed Brand Opportunity
I love Pepsi. It's that slightly sweeter taste and the all-American logo combined with the non-conformist statement that, well, it's not Coke.
Strategy and Tips for a Successful Logo Design
Visual processing is the most important way for gathering information for all human beings. A good design or graphics work is remembered for ages and that is what drives the multinational companies to spend millions of dollars on developing their logo and other branding material.
Articles: The Perfect Branding Tool
If you own a web-based business, you're probably aware of the need for things like link exchanges, lead-purchasing, SEO copy, banner ads and all of the "traditional" ways to get exposure on the World Wide Web.But did you know that article marketing is by far the best way to build your brand while at the same time increasing your exposure?Web articles.
Why Should I do Business With You?
It's the question that is on the minds of all our customers regardless of what products or services we are offering. Potential customers want to know what makes you so different and why should they do business with you as opposed to one of your competitor's.