5 pricing strategy examples that will boost your profits and put your business ahead of the competition

For infant businesses, mapping out a price plan will give you a clear vision of what road you’re preparing to travel through.

A pricing strategy is what a business uses to label the cost of their products (or services) so they can gain as much profit from their sales as possible.

Sometimes it means pricing things at an expensive rate to gain profit, other instances require businesses to lower prices so that customers will flock towards them. Whether your business is a start-up, or you’re an established company that’s offering a new product or service, you’ll benefit tremendously from price plans.

Think about what customers search for during the shopping process.

All shoppers look for the best possible bargain–but do some think that an expensive product or service means the quality is better than a competitors? Or if you implement a fair and affordable increase in a popular product, will customers be accepting of this change?

~ ~ ~ ~ ~ ~

Let us help you put these pricing strategies to work.  Sign up with Blitz today for a 30-day free trial of our lead management software and use our sales follow up system to turn more leads into customers.

~ ~ ~ ~ ~ ~

5 pricing strategy examples that will help you create your own

1. Discounted pricing

This is probably difficult to do if you’re a newborn company; but if it’s executed properly, the benefits will far exceed your expectations. The basic idea behind a discount promotional strategy is to lower your prices in order to gain new customer, but not gain a large profit.

The products you sell are at a price that’ll generate enough funds so you can break even and maintain your business, but you’ll appeal to a large pool of customers. For example, this is one of the pricing strategy examples that works best for businesses like a grocery or convenient store that offers a variety of products at an inexpensive rate. Combining discounted products and regular-priced products in one location will draw customers into the business for a discount, but indirectly encourages impulse purchasing on regular-priced products.

2. Premium pricing plans

On the flip side, a premium pricing plan will attract an exclusive pool of customers because products and services are given at an expensive rate. Think of Apple, who never discounts or has sales. They maintain their status as a premium product this way. Using premium pricing plans limits your potential buyer pool, but offers a larger profit margin, and the ability to produce a higher quality product. Psychologically, higher-priced products have a higher perceived value by customers.

3. Inverted strategy

A list of pricing strategy examples without an inverted strategy would be incomplete, even though it can be problematic for many companies. What this price plan does, is take a product or service of high quality and put it at a low (say, $1 for the first six months), or free price. Although it seems like you’re devaluing the cost of your product, the inverted strategy is a great marketing tool–especially for new businesses who simply need to build a list of customers to market to. Software-as-a-Service (SaaS) businesses can most easily use this strategy, because it costs almost as much to have 100 customers as it does to have 1.

4. Competitor’s strategy

Like all of the above mentioned price plans, the value you put on your product or service has to be the best fit for your customers. When you have steep competition, some businesses concentrate on pricing your business services at the lowest possible rate. That’s not to say it will be inexpensive, but you want to beat your competitors. You’ve probably seen this strategy at gas stations that are across the street from one another. This strategy isn’t the easiest for most small business who need to profit to survive, however, if you’re a bigger business with many competitors, give your customers and leads a reason to step onto your turf.

With this strategy, if you’re selling the same exact product as the competition, there’s a great chance that they’ll ask why your prices are different. Make an effort to understand and break the pricing down for them, and show why your company is worth it. On the other hand, you could offer the same exact pricing as your competitor rather than driving down prices and perceived value in your industry, a common issue in creative service industries like design and photography.

5. Internal pricing plan

Of all the pricing strategy examples, this one is the only price plan that is competing with itself. With the internal strategy, you’ll have to check out your inventory and see what products are similar to each other. Say you own a shoe store and hold two types of shoes that (essentially) are identical. You’ll have to price them differently so they sell. Maybe they’re the same shoe from the same designer, but one pair has rhinestones on it and the other doesn’t. Offer the shoe with the rhinestones at a higher price and leave the modest one as it was intended to cost. By comparison, the shoe without the studs on it will seem reasonably priced for people looking for an affordable shoe. If both shoes are priced individually, they’ll be more appealing to your customers.

~ ~ ~ ~ ~ ~

Let us help you put these pricing strategies to work.  Sign up with Blitz today for a 30-day free trial of our lead management software and use our sales follow up system to turn more leads into customers.

~ ~ ~ ~ ~ ~

Are there any pricing strategy examples that you use for your business? Share your answers in the comments!