Price and Perceived Value

Knowing how customers and prospective customers view your products or services is important to your pricing structure. Customers will generally only pay a price that they believe closely reflects the value offered by the product/service. Most of this is based purely on perception. Perhaps they had an experience with your products/services and related customer service in the past and have established some mental threshold in terms of what they will pay for your products/services. Or, through word of mouth or some other means, they heard about your company, products or services and have formed an opinion about value. Maybe they have seen ads or some other promotional or information piece and have been influenced in that way. In any case, perceived value is important to the level of pricing established. If the value is perceived to be less than the price, sales will suffer. And if price and value are in line or value is perceived to exceed price, sales should be strong. The key is understanding how customers and prospective customers view your company and its products and services. Market research is the best way to determine this. Do you know how customers "value" your products or services?

Good Luck & Good Selling!
Russ