Have you seen anyone on a hoverboard? (If so, maybe you noticed that technically, they weren’t hovering.) Misnomer aside, they’re cool — somewhat Jetsons-like. In fact they seem to be on a path to success that the Segway people must have hoped for about 15 years ago.
The person you saw riding it probably paid between $300 and $1,800 for that hoverboard. I don’t know how much it costs to make one, and I’m not privy to the process the first hoverboard companies went through to figure out what they were going to charge for one.
But they were in a good and unusual position — they had something which was sure to be a hot item. How did they decide on a price? I’m sure they put plenty of thought into it, but face it — within reason, whatever number they landed on, they were going to do very well.
You, however, aren’t so lucky. You don’t have a super cool gadget that’s going to rock anyone’s world. So the question is, how can you be sure that your products or services are priced as optimally as possible?
How do you know you couldn’t charge a little more without losing sales? Or wouldn’t profit more by charging a little less?
When I raise these questions with clients, I can tell that they assume their prices are just fine — maybe perfect, in fact. Their manner and tone indicate that it’s a consideration of little consequence.
Yet no doubt many of those same people will turn off the bathroom light their kid always leaves on in the morning, for a savings of seven cents per day, 50 cents per week, $25 per year.
Depending on the size of your enterprise, imagine the difference to be made over time if a slight uptick or downtick in pricing would lead to greater profits.
You almost certainly could benefit by learning more about the marketplace, current consumer preferences and other variables. Setting prices or fees is one of the most important business decisions you can make. Don’t sell yourself short. (see what we did there?)
Do some research and find your pricing sweet spot.