Ebook Sample Content Preview:

Chapter 7: How to Price Your Product & Service

A business might set or adjust prices when they start up, when introducing a new product or service, to achieve a new business objective, or in response to changes in the marketplace or the general economic climate. Whatever the occasion, setting prices for your products or services is possibly one of the most important business decisions you make. It does have a considerable impact on your profitability and thus can be a decisive factor in the financial success or failure of your business.

Determining a pricing strategy should not be carried out in isolation but in relation to your evolving business strategy. You need to be clear about what your pricing objectives are, how they relate to your general business objectives, and how they tie in with your marketing and sales plans.

Pricing Strategies

Cost Plus Pricing

This takes the most cost of producing your product or service and adds an amount that you need to make a profit. This is usually expressed as a percentage of the cost. It is generally more suitable to businesses that deal with large volumes or which operate in markets dominated by competition on price.

It is important to be aware of the effect any price change will have on variable costs and factor this into your calculations. Care must also be taken not to overlook hidden costs and inadvertently overestimate potential profit per sale. This approach also disregards potentially important factors such as business or brand reputation, market positioning, and the value of the product or service to the customer or client. Indeed, setting prices based just on costs can result in selling a product or service at less than the customer or client is willing to pay, thereby failing to maximise potential revenue.

Value Based Pricing

With value-based pricing you focus principally on assessing what the product or service is worth to the customer or client and set the price accordingly. The aim is to avoid charging too little and so missing out on potential revenue while not setting the price higher than the customer or client is willing to pay. The key is to identify the benefits you offer the customer and ensure they understand and appreciate them.
If you have clearly-defined benefits that give you an advantage over your competitors, you can charge according to the value you offer customers. While this approach can prove very profitable, it can alienate potential customers who are driven only by price and can also draw in new competitors.

In a competitive environment it is especially important to differentiate your product or service by demonstrating unique features and benefits wherever possible. The more you can enhance the exclusivity of your product or service or demonstrate genuine added value that your competitors do not offer, the more you will stand out in the marketplace and the easier it will be for you to command higher prices.

Ebook Sample Content Preview:

Equally important is to ensure you are getting all of your vitamins and minerals. These are crucial elements in our diet that lead to greater energy and greater function throughout our bodies.

Vitamins and minerals improve everything from our mood (by contributing to the creation of hormones and neurotransmitters), to our sleep, bone density, energy efficiency and more. Adding a smoothie to your daily diet can make a huge difference – and in this case it’s worth the sugar! Clean, Sharp and Impressive

Another tip is to invest in your hygiene and your style. The secret is to feel good and to look good. When you do this, you’ll find it’s much easier to stay positive, productive and driven. Get your hair cut regularly, make the effort to wear sharp outfits that really suit you and maintain good hygiene.

When you feel clean on the inside, you’ll express that on the outside. And when you feel confident in the way you look, you’re give off an aura of success that will lead to more opportunities.

More Lifestyle Tips

We’ve already addressed the value of meditation and this is a great tool you can use to keep your mind relaxed. If you find that you struggle a lot with stress, then you should also think about addressing the sources of that stress, which may even mean quitting your job.

You can also try seeing a therapist. Often the most effective form of therapy for stress is ‘CBT’ (cognitive behavioral therapy) which will help to teach you the mental tools and skills that can help you to eliminate unhelpful thoughts and anxieties.

Finally, if you can find the time and the energy, it is very much worth spending some time on a basic exercise regime.

Even if your goal isn’t to lose weight or build muscle, exercising will simply help to give you more energy and focus throughout the day. It acts as a natural depressant, improves the energy efficiency of your cells and even helps you to get more energy to your brain. AND it leads to better sleep!

Ebook Sample Content Preview:

When you do, your brain will light up and come alive and you’ll get a reprieve from your money and relationship problems. Better yet, you’ll form new neural connections which will once again help you to become sharper, smarter, faster, more creative and more alive.

What is a Flow State?

If the idea of subjecting yourself to novel states – or ‘rich environments’ – sounds familiar, then you may have read Rise of Superman: Decoding the Science of Ultimate Human Performance by Steven Kotler.
In that book, Steven describes what is known as a ‘flow state’ in detail. This is the condition in which we are most alive, most happy and the best at performing.

It’s the exact opposite of wandering around and being stressed about work.

In a flow state, you are so engaged with the surroundings and what’s happening that you forget ‘yourself’ entirely. Sound familiar? It’s almost like a form of meditation, except this time you are completely switched onto the world around you.

This is something that most of us have experienced at some time in our lives and you may be familiar with it even if you think back.

Have you ever dropped something out of a cupboard and moved so fast to catch it that you didn’t even think?

Have you ever been playing sports, when suddenly the world seemed to slow down to a crawl and you were able to move with superhuman reflexes and break your personal record with some kind of superhuman feet?

Have you ever been writing and been so engaged with what you’re saying that you’re able to completely lose track of time?

Have you ever been in a conversation that lasted all night?