Should I charge more and risk losing a sale?
We are a new media company trying to get advertising campaigns from enterprise customers. We have been doing some advertising with low margins for individuals or smaller businesses, but we want to increase our prices. The problem is, I can't be sure if the campaign will be worth the price I set for it. So, out of guilt, charging less seems a lot more appealing to me. Charging more would be risky as I could lose the sale altogether. What should I do?
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Hi @bgrgndzz! When experimenting with pricing I suggest starting out very high. It’s okay to lose deals. If you’re consistently losing deals then and keep lowering the price slowly until you are consistently winning deals (roughly 20% of the time). Once you hit this consistency then start to slowly raise the price again.
If you’re winning deal after deal, especially when you’re providing a service, it likely means your pricing is too low.
You want to hover between the prospect consistently complaining the price is too high, yet you’re still closing 20% of deals.
You should always be experimenting with pricing. Hope this helps!!
Pricing is a really important aspect @bgrgndzz. My suggestion would be that until and unless you have established your brand in the market, you should rather stick to lower pricing. Sure, your revenue might go up by raising the price, but brand awareness is more important in the early stages of a company.
For instance, I have been working on my product, ruttl.com and after the beta testing ends, I am soon going to be launching the tool. As far as the pricing for this tool went, I tried looking up at the nearest competitors and analyzing how much I might need to invest into marketing, in order to charge higher.
The basic principle of marketing is if you cheap price, cheap marketing OR high cost, expensive marketing. So my advice would be to play it out for more time and stick to the lower costs.
hey @bgrgndzz, that's a tough one but here's my take.
when talking about pricing, shoot your price first. it sets the anchor point. now the convo should revolve around this number. Also, people love shortcuts. A good one is that people tend to associate a higher price with a higher value.
after that, other piece of advice, never negotiate pricing over email. always do it over the phone. It's all in how you deliver your message.
for more tips, visit makesales.io :)