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Avoid the pricing trap

- Kelly Sharp is the owner of the Heart of Iowa Market Place in historic Valley Junction.

What are my products and time worth?

Answering that question may be the hardest decision any businessperson makes.

Unfortunately, it's also the most important decision a businessperson makes. And that goes double for specialty retailers.

Set your prices too low, and, if you don't go broke, you'll run yourself ragged trying to scrape by.

On the other hand, set prices too high, and you just might go broke, too, because customers will find a cheaper option. (At least that's the conventional wisdom.)

Whether you've worked in the same small store since you were in high school or you graduated from the best business school around, pricing decisions are hard because so many factors come into play.

For starters, it seems like the very structure of pricing conspires against us.

Look at any book on the topic, and words and phrases like "discount" "below competition" "bundle" and "high-low" jump off the page. Almost everything pushes us to lower prices.

That's even before we get into the real world of big and small competitors, fixed costs, employee pay and benefits, and rising product costs.

One thing I know for sure: When you compete on price, you and your business fall into a deadly trap.

You're smarter and better than that.

I know I certainly am. Best of all, our customers know it, too.

Why? Because our promise is to deliver a unique experience. Not only do we deliver on that promise, but we never stop looking for ways to deliver more value.

I know my prices aren't going to be the lowest. My customers know that, too, because they're smart enough to recognize and appreciate value.

What's your promise to customers? And, what, if anything, keeps you from delivering on your promise?

When you answer those questions and clear any barriers to delivering on the promises that matter most to your customers, falling into the pricing trap will be the least of your worries.

Comments

Great points, Kelly! I have found that the customers we want and strive to keep are the ones who value what we do for them and the peace of mind they have when they put a project in our hands. Thank you for all your good tips!
Mary Anne Kennedy

Well stated, Kelly. You're continuing to build and live your brand, and clearly, your customers value the experience Heart of Iowa Marketplace provides them.

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