Pricing Strategy For a Retail Business ? Is Your Price Model Setting ...

Too often, retail owners will try to race their competition to be the lowest price reseller in their niche. Unfortunately, this causes you to race your competition straight to the bottom, where no one makes any money. Read on to find out a new pricing strategy, where you can charge MORE than your competitors, work with less hassle, have better customers, and make a lot more money in the process.

Instead of racing your competition to the bottom, you need to focus on moving the customer away from your price and move them towards your entire package, where you offer an experience for them. You need to engage value and their emotions instead of just their bank account.

Think of positive experiences you had with a certain brand as a child. Here, there is an event and and a whole list of emotions that go along with the product or the place. The price had nothing to do with the equation. There are products that I enjoy, where I will pay 2-3 times more than the discount brand just because of the emotional connection with the product.

Price buyers are only 20% of your customers. 80% of your customers are coming to you for other reasons (unless of course, you are a deep discounter, then it could be 80% are price buyers). You can position your products as one-of-a-kind, where they offer prestige and status to the people that own them. You can position your business so that your service is so extraordinary, that a customer would never think of going anywhere else as long as they are treated consistently.

As soon as you focus on price, you are setting yourself up for failure. You are creating a commodity out of your business, where you are telling your customer that you have nothing else to offer except for a good deal. This is a race to the bottom, a place you never want to be, a place that leads to bankruptcy.

Instead, develop a package deal that is bigger than the product. Create a pricing strategy that is built around the value that you create instead of the actual price of the item sold. The product is only about 40% of the sale. There is a lot more that goes into the buying decision for the customer. Ignore the price buyers. They are your worst customers. Instead focus on the other 80% that are looking for something more. If you can involve their emotions in some way, you will create customers for the long-haul.

Pricing Strategy For a Retail Business ? Is Your Price Model Setting You Up to Fail?

Source: http://www.financialcrossing.com/pricing-strategy-for-a-retail-business-is-your-price-model-setting-you-up-to-fail/

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