Setting the price for your offering is critical. Price dictates whether or not your offering will succeed or fail in the marketplace. A price that’s too low can cause you to operate in the red or leave profits on the table. However, a price that’s too high could create drag on the sales cycle or make it tough for your salespeople to close deals.
Why Common Pricing Strategies Fail
When setting price, you’re looking for the optimal price to maximize profitability. That number is not the highest price possible nor is it based solely on what your competition charges, yet I hear many marketers talk about pricing in exactly those terms. Here are the two most common approaches to pricing I see.