What to charge.
WHAT TO BASE PRICE ON
The value to the buyer, and what the market bears.
WHAT NOT TO BASE IT ON
Your costs alone What competitors charge What feels comfortable
WHY COSTS ALONE FAIL
They set a floor, not a price.
WHAT TO ESTABLISH
Your actual cost to deliver and support.
WHY
Below it, volume makes things worse.
WHAT TO RESEARCH
What comparable providers charge, and what they include.
WHAT TO NOTICE
Whether you are the cheapest.
WHY THAT IS A WARNING
The cheapest attracts the most demanding and least loyal customers.
WHAT TO TEST
Raising prices for new customers.
HOW
Change it, and observe conversion.
WHAT USUALLY HAPPENS
Less change than feared.
WHAT TO DO ABOUT EXISTING CUSTOMERS
Consider holding them, or increasing with notice.
WHAT TO REVIEW ANNUALLY
Whether prices reflect current costs and value.
WHY ANNUALLY
Costs rise, and prices held indefinitely erode margin.
WHAT TO DO ABOUT INCREASES
Communicate early, with a reason.
WHAT TO EXPECT
Some departures.
WHAT TO CALCULATE
Whether the increase outweighs them.
WHAT TO AVOID
Discounting as a standing practice.
WHY
It becomes your real price.
