One of the biggest challenges many organizations encounter is understanding how to price their goods or service correctly.
When making pricing decisions, you’re going about it all wrong if you are focused on the product’s materials and manufacturing expenses. The correct approach is to match the price to the value and then focus your marketing efforts on demonstrating this unique value to your clients.
Putting a Price on Your Offer
Do you know what your product or service is worth? The value of what you offer is determined by how well technology speeds up processes, saves individuals money or time, eliminates difficulties, or solves problems and pain points. It is not just about how your product accomplishes these elements but how it differs from other items available on the market, i.e., what your competitor has on offer.
Create a UVP – Unique Value Proposition – to identify your product’s uniqueness and how it helps customers solve challenges. A UVP is a short sentence that promises the potential customer by describing how utilizing the product will improve their lives and address their pain points.
Once you have pinned down your UVP, you can begin proving the unique value of your product to members of your target market. Here are some pointers to help you achieve this.
Benefits Are More Important Than Features
Our instinct is to talk about the product’s characteristics and features. After all, the features you’ve been working on that you’re most proud of set it apart as something unique on the market. However, it would help if you avoided this tendency. Instead, concentrate on how the primary characteristics of your product translate into tangible user benefits.
Your software tool, for example, combines all of a user’s social network feeds into a single news feed. This is an outstanding feature. But go a step further and say that it saves the customer time from having to check each feed and helps them spot trends more clearly so they can make the best marketing decisions possible.
Understand the Competition
To effectively communicate your product’s unique value, you must be well-versed in the competition and its offerings. Customers may have used a competitor’s product before, so you will need to explain how yours differs from and outshines the other products available on the market.
During the development stage, focus on creating a product that delivers something distinctive. It still requires improvement if you can’t quickly and easily outline what your product brings to the table over and above what’s already available. Pricing lower than the competition may help you sell more, but price should not be your main selling point. If that’s the case, any competitor with the resources to offer a lower-cost product will ultimately outperform you. Make sure the product has something special about it.
Get to Know Your Clients’ Expectations
You have no control over the worth of your product. You’ll have to rely on their input because it’s up to your customers/clients to figure it out.
What have customers said they enjoy about your product or purchasing from you? Why do customers choose you over a competitor? Why do people keep coming back to you for more? What motivates them to become brand ambassadors? Start a conversation with your customers to gather their input on the unique value your product delivers to them.
No Further Sales
The sales process gets much easier once you understand how to describe the value of your product. You do not have to sell much. It would be best to enter into a productive dialogue with the prospect through which you demonstrate what your solution can achieve for them and collaboratively decide whether it meets their needs.