How The Pricing Of Your Products/Services Can Affect Your Sales

A big factor that comes into play when someone is deciding whether to buy something as well as quality is the price. It’s how the consumer assesses whether or not they are getting value for their money in a purchase. And so the pricing of your services or products is pivotal into helping convert those leads into sales. A common misconception when it comes to pricing is that the lower you price your product the more sales that you are going to get. And whereby lowering your price can secure you more sales what you’re doing is lowering the value of the service and/or products on offer.

Raise Your Prices

When we’re discussing how to increase and boost sales in your small business it might sound odd for us to start suggesting that you raise your prices. But hear me out. It’s okay raising your prices in business but what you need is the justification for raising your prices. Let’s have a look at an example scenario. Let’s say usually each week you work 10 hours and charge £25/hour for your time. This gives you to take home of £250 per week. Now, let’s say you were to charge £30/hour and then only work 8 hours. This does indeed mean that you’ll be earning £10 less but what you have now is 2 extra hours available. These hours can then be put into sourcing and meeting new clients.

Give Clients Discount For Quantity

A commonly used strategy by businesses across all industries to boost sales is to essentially use quantity as bait. By this, we mean that you are offering the customer a discounted unit price for the more units they buy. For example, let’s say you’re after some business cards and you see the price for 1000 being £10. A good incentive for you to buy more would be to offer 3000 cards for £24 meaning that rather than it being £10/1000 cards it is now £8 which secures more sales for them as well as providing a discount to you as the consumer. This is most commonly used in businesses that are selling products but can also be used in your small business if you’re selling a service.

Psychological Pricing

This is by far one of the most heavily used and effective ways of increasing sales within businesses around the world and you no doubt might already be aware of it. When we say ‘psychological pricing’ what we mean is when you price your product at a certain price that psychologically appears to the customer as a lot less than it is. Take for example if you usually sell an SEO package for £200. It’s been proven that pricing it at £199 appeals to the customer a lot more despite it only being £1 less due to the science behind this pricing strategy.

Reduce Pain Points During The Buying Process

You may have heard the saying ‘spend until it hurts’ and that is true when it comes to neurological science. Our brains are tuned to keep spending until it hurts for us to spend anymore. So how as a business can you increase sales based on this? You need to reduce the pain points along the sales process. One such way is to reframe the value of your product. What we mean by this is that let’s say you offer an SEO package that costs £1000/year. It can sometimes be difficult for the consumer to evaluate the value they’re getting. As opposed to if you broke it down to £84/month its much easier for them to dissect and then evaluate.

Introduce Tiered Pricing

This is something that we have touched upon previously when we talked about the Service/Product mix (link back) when we talking about packaging. This is extremely useful if your business sells a service rather a product. When we refer to tiered pricing what we could mean is that you have, for example, a bronze, silver and gold package. For each, you would break down what exactly you get in that package for that price. This then leads the consumer to compare for example the bronze package to the silver package and potentially then look to upgrade to the silver package therefore increasing the value of the sale.

Summing It All Up

These are just some of the methods you can use when pricing your products and services to have an effect and increase the sales within your small business. If you are unsure of whether your pricing could be improved to boost the number of sales your business get in touch with me and we can run through your business to scan for areas of improvement.

In the meantime read on to discover more ways to boost sales in your business today.