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#38 – How to Price Your Product or Service

Nobody buys because of cost, or even price.  The best way to position what you offer is based on value.

 

Here are the 3 pricing rules:

Rule #1: Value is subjective.

Stop talking about costs.  People have different perceptions of pricing so segment your pricing based on how your different client segments perceive value.


Rule #2: All pricing is contextual.

You may have the same product or service as someone else, yet you can change or control the context so people feel like they are getting more value from you.


Rule #3: Always offer 3 choices.

If you offer the customer one choice you have a 50/50 chance of closing the deal.  With two choices you force them to make a price based decision. Three choices is optimal because with three, they ask “Which one should I buy?” instead of “Do I buy?”  They are forced to make a value based decision.

You can apply these rules from products to professional B2B services.  It works anywhere.

 

About Jon:

Jon Manning has spent most of his career pricing products and services, in both the corporate world, as well as advising clients via his consulting business Sans Prix. In 2011, he launched the world’s first and only crowdsourcing platform for Pricing (PricingProphets.com) where companies can ask a panel of global pricing experts and thought-leaders what price they should charge for a product or service, and why.

Over the last 12 years, Jon has completed dozens of major consulting projects for companies in the Dow Jones Industrial Average, the Fortune 100, the FTSE100 and the CAC Next20 stock market indices, and in the process has generated millions of dollars in incremental revenue for clients in places such as the UK, USA, India, & Australia.

Increasingly in demand as both a speaker and educator, Jon has spoken at over seventy conferences, workshops, educational institutions, webinars and other events across the Asia-Pacific, the Middle East and the UK. Between 2007 and 2009, he co-presented the “Pricing Strategy & Revenue Management” Executive Education Programme at Lancaster University Management School.

Jon holds a Bachelor of Business (Applied Economics) from Deakin University (Australia), a Graduate Diploma of Business (Management) from Monash University (Australia) and a Master of Arts (European Studies), from the University of West London (formerly Thames Valley University) in the UK.

He is a member of the Professional Pricing Society, and his articles have been published in The Journal of Professional Pricing, The Journal of Revenue and Pricing Management, The Pricing Advisor, The Wiglaf Journal, SmartCompany.com.au, LeadingCompany.com.au and the ANZ Small Business Hub .

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