{"id":8421,"date":"2014-08-09T14:00:00","date_gmt":"2014-08-09T18:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=8421"},"modified":"2020-03-30T19:00:21","modified_gmt":"2020-03-30T23:00:21","slug":"hitting-sweet-spot-find-perfect-price-product","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/hitting-sweet-spot-find-perfect-price-product","title":{"rendered":"Hitting the sweet spot: how to find the perfect price for your product"},"content":{"rendered":"<p>You get what you pay for.<\/p>\n<p>We\u2019ve all heard it, and while this old adage sometimes rings true, it\u2019s not always the case in today\u2019s digital world.<\/p>\n<p>Sure, you\u2019ll always find some people dead-set on the idea that the best products are priced on the high end, but recently, consumers have stopped assuming the price point directly coincides with a product\u2019s value.<\/p>\n<p>Instead, they\u2019re comparing their options and trying new products that are more affordable, making pricing at a higher level a risky gamble.<\/p>\n<p>So where does that leave you? You\u2019ve created a great product that you\u2019re ready to launch, but you don\u2019t know how to price it.<\/p>\n<h3><b>Classify your price points<\/b><\/h3>\n<p>There are two paths you can take in terms of product pricing: the high end or the low end.<\/p>\n<p>If you\u2019re adamant about sticking to a higher price, only large enterprises with sizeable budgets will be able to afford your product. And while this pricing model can lead to a larger paycheck, there are a few serious risks to this route \u2014 especially for a newer company:<\/p>\n<ul>\n<li><b>A lack of credibility: <\/b>Most big companies don\u2019t look for cutting-edge products. Rather, they look for established brands with a proven track record. If your product or company is new to the market, you probably don\u2019t have enough credibility to land a deal.<\/li>\n<\/ul>\n<ul>\n<li><b>Extended onboarding time:<\/b> If a large corporation purchases your product, the onboarding time is usually extensive. This means many calls, demonstrations, negotiations, and training sessions, which could take months.<\/li>\n<\/ul>\n<ul>\n<li><b>Late payments:<\/b> You\u2019ve slaved away for months to land a big client, and just when you think you\u2019re about to cash a check, you get hit with the company\u2019s payment terms. Larger companies often require invoice payments that can exceed 90 days, so you better have money saved up.<\/li>\n<\/ul>\n<p>On the other hand, pricing your product on the low end of the spectrum makes it more accessible for everyday consumers. Other advantages include:<\/p>\n<ul>\n<li><b>Market distinction. <\/b>Price is a product feature. At the end of the day, companies weigh the cost and benefits of any new product they use. Having a low price point can help tip the scale in your favor.<\/li>\n<\/ul>\n<ul>\n<li><b>Stability. <\/b>Most startups apply the 80\/20 rule, meaning that 80 percent of their revenue comes from 20 percent of their clients. But when they lose a big client, the entire business suffers. With a lower price point, many more small- to medium-sized businesses drive your revenue, which is more stable in the long run. If you lose a client, it won\u2019t rock your entire company.<\/li>\n<\/ul>\n<ul>\n<li><b>Mass appeal.<\/b> Because you\u2019ll attract a larger pool of clients, you\u2019ll learn how to meet the needs of a diverse client base. You can then apply this information to improve your products, ensuring it appeals to the largest number of consumers possible.<\/li>\n<\/ul>\n<h3><b>Choose your model wisely<\/b><\/h3>\n<p>Even if one strategy sounds more appealing than another, you can\u2019t jump the gun and arbitrarily choose a price for your product. You must analyze the market and your company\u2019s unique needs before you make any decisions. To evaluate which option is the best fit for your company, here are a few guidelines you can follow:<\/p>\n<p><b>1.\u00a0\u00a0\u00a0\u00a0 <\/b><b>Validate your product.<\/b><\/p>\n<p>To be successful in the marketplace, your product has to be able to compete with pre-existing products. Never allow pricing to become a barrier for early adopters. Once your product is fully tested and validated in the market, you can begin to find the right price point.<\/p>\n<p><b>2.\u00a0\u00a0\u00a0\u00a0 <\/b><b>Consider supply and demand.<\/b><\/p>\n<p>One of the most obvious principles to setting a price point is identifying how many people will want your product and how saturated the market is. It seems simple, but many products fail because companies don\u2019t conduct market research. Take the market\u2019s temperature, and adjust your price accordingly.<\/p>\n<p><b>3.\u00a0\u00a0\u00a0\u00a0 <\/b><b>Find your competitive advantage.<\/b><\/p>\n<p>Identify your product\u2019s competitive advantage by understanding the unique value in your product and gathering information about a competitor\u2019s product. With this information, you\u2019ll see where your product excels and where improvements are needed. This will help you recognize whether it\u2019s more appropriate to price on the lower end or the higher end.<\/p>\n<p>Whether you\u2019re peddling plastic blocks that turn into a best-selling toy or writing groundbreaking software that could forever change the digital landscape, finding the right price point is essential.<\/p>\n<p>Entrepreneurs must be aware of their market, competitive advantage, and the type of customers they\u2019re hoping to attract to find their product\u2019s pricing sweet spot.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You get what you pay for. We\u2019ve all heard it, and while this old adage sometimes rings true, it\u2019s not always the case in today\u2019s digital world. Sure, you\u2019ll always find some people dead-set on the idea that the best products are priced on the high end, but recently, consumers have stopped assuming the price [&hellip;]<\/p>\n","protected":false},"author":1247,"featured_media":8507,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-8421","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v25.3.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hitting the sweet spot: how to find the perfect price for your product<\/title>\n<meta name=\"description\" content=\"You\u2019ve created a great product that you\u2019re ready to launch, but you don\u2019t know how to price it. 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