How do you determine the price of a product or service?
Regardless of size or industry, pricing is influenced by more factors than just what the customer is willing to pay. Pulling a number out of thin air isn’t the best way to go about it. There’s unseen factors at hand and you could wind up under water even if your product sells fast.
At BottomLine, we’ve put together a handy formula to help you set your pricing.
designed by: Kissel Cablayda-Amamio
If you’ve got questions about pricing, or how to bring your product to market, we’ve got the answers you need. We’ve helped brands big and small get to launch and beyond, and we’re here to give you the right advice. Get in touch today to start your journey.
What’s the value of research?
I’ve asked this question way more times than I can count- why should we do market research? Why don’t we just split-test instead? I feel my eye twitch a little bit in the corner at the second remark. The real value of research is hard to quantify but can be broken down into a few really simple concepts:
- Time: Plain and simple, time is your most valuable resource and if you’re wasting it focused on the wrong target or your message is totally missing the mark…well need I say more?
- Opportunity Cost: Another really simple concept that I feel so many businesses aren’t really thinking about. If you’re targeting the wrong customer and could be servicing the right one, you’re leaving a lot on the table. Split testing will always be needed but I believe in starting with a good foundation for a test. If you don’t understand the basics of who you’re targeting, you’re going to spend a whole whack of budget on split tests to figure out what market research could have told you from the onset.
- Brand damage: Another piece that people aren’t really factoring in when evaluating their options. If you’re changing your brand messaging and it’s off-kilter, you run the risk of hurting your brand. If the message is drastically wrong and you annoy some of your customer base, that damage can be hard to repair.
So what does research really give you? I may be biased, but I feel like it gives you SO much, but in a nutshell:
- Clarity: It’s much easier to make decisions when you have a clear picture of what you’re dealing with. So many people make decisions about their business/brand/marketing without that clear picture that they go on the assumption that they know their customer and their business, but I often challenge that with a simple “are you sure”, and more often than not, when we complete research we find out that there was something vital that the client wasn’t aware of.
- A competitive advantage: I always tell clients that the beauty of mystery shopping and competitive analysis is that we ALWAYS find something that the competition is either a) doing poorly or b) missing, and our client can capitalize on that information. Why wouldn’t you want that opportunity for your business?
- Objectivity: We all get too close to our tree from time to time and having someone who’s not emotionally attached to your business can help you see what you aren’t. I often make the joke that I get to tell my clients “their baby is ugly” (with love of course!) but in seriousness, it’s our job to see what the client is not and help them understand what that means for a step forward. “You have to look past the obvious if you want to be the king of the hill, because often it’s the questions you’re not asking that can kill your business.”
Market research doesn’t need to be challenging, expensive or insanely time consuming- it can start with just having a simple conversation with your customers- you might be really shocked (and amused) with what you find out.
Need some help with your market research? Give us a call or drop us a line: email@example.com