For over 10 years, this award winning Blog has been a Forum where Australian Small Business Owners can exchange Ideas and Advice with experts in Australia on how to Improve their Businesses through better Business Management, Planning & Strategy, Business Management Systems and Marketing Strategy.
Our Ultimate Objective is to help Australian Business Owners Make their Business Run without Them and to achieve their Goals where ever they may be in Australia.
When promoting their offers, organizations struggle with a strategy to set their prices. Too high, and nobody will purchase, too low, everybody will purchase, yet they won’t survive. So what is the right way to establish your pricing strategy?
Economic theory tells us that you ought to set your prices as high as your market permits. Yet, what does that mean?
While our dog is getting on in years, and suffers from arthritis and is almost blind, there is nothing wrong with his sense of smell and he loves his food. If you give him top grade steak, or just plain dog food from the can, he gulps it down the same way he did when he was a puppy. He will eat what our cat doesn't finish from her bowl. In fact if she throws any of it up, he will eat that too. He is just not that fussy. In fact the only thing we have found he won't eat is brussel sprouts. (I can't say that I can blame him.)
For most businesses there is are 2-3 big players in their industry. These business are well known to people outside your sector. They have well defined niches which they dominate. They don't even know you exist, but you and your customers certainly know they do.
From time to time, even the best products and services get lukewarm, or even bad reviews, but there is one industry that has become infamous for its twisting of such reviews. In fact they are often shameless. Even so, every once in a while you have to admire their creativity.
Jenny runs an architecture practice. She does some advertising, and always asks how enquirers found her, so she has a good idea how well her advertising is working, and has a good estimate of the cost per lead. She also knows how many of these turn into clients, and has come up with a cost per sale, but is this the reality?