Pricing comes so easily to some but others (most of us I would guess) struggle.
This struggle could be causing you to sabotage your own business without you realising!!
Here are 4 tell-tale signs that you’re pricing strategy is wrong:
- You find yourself constantly filling orders but money is still an issue.
- Your customer feedback is full of praise because you’re such ‘good value’.
- When you price your items you compare yourself with the cheapest on the market.
- You feel stressed whenever you think about raising your prices.
How do you stop the cycle?
This is quite easy to write but not so easy to implement as a lot of it comes down to mindset…
1. You need to set some time aside and really get to know your numbers (you will have heard us bang on about this many times already!). You need to know where your money is going so that you can see if there are any savings to be made for example are you buying your materials at wholesale prices?
This will also enable you to clearly see how much profit you are actually making on each item – some items may be more profitable than others.
2. If your customers are telling you that you’re ‘excellent value’ it’s a sure sign that they value you and your work more than you do!!
Take on board this feedback and look to raise your prices – you can do this in small implements and offer loyalty discounts if raising prices makes you feel too uncomfortable right now.
3. This is TOTALLY mindset!!
Did you know that you will view the value of your product through your experience with money?
So if you’re struggling financially (most of us with fledgling businesses are!) you will view pricing from a struggling mindset.
For example you will find yourself shopping in Aldi/Lidl and price with this in mind, however your customers are over in Waitrose and have a completely different relationship with money!!
If you find yourself looking for the market value of your product and enter ‘cheap animal prints’ into the search engine, guess what? You’ll be looking at the bottom end of the market trying to compete with mass produced goods!
To get a balanced view you also need to search for terms such as ‘exclusive animal prints’ or ‘unique animal prints’.
Ensure you look at a full range of prices and see how the quality of your items fits in these markets, ask friends to help evaluate the comparisons and price accordingly!
4. I get this, what happens if your customers run for the hills when you raise your prices?
Chances are they won’t, these are the people who already value your work!
Some won’t return but if your margins are right, you can produce less and earn more so this won’t affect your business.
You will also find yourself getting more orders from your ideal customer.
Remember you are running a business here!!
I hope these tips help and feel free to reach out with any questions.
Do what you love and be kind to yourself.