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What is the right price for your product or service?
Most small business owners struggle with this
question, because they confuse the cost of
producing the product with the value it brings to the
customer.
When it comes to establishing a price for your goods
or services, the value of your product has absolutely
nothing to do with production cost.
The value is based on how much you help clients
save, increase, reduce or improve. If you can
quantify these benefits, then you have a foundation
for establishing an appropriate price for your goods or
services.
| It is All About Value |
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Think about your last software purchase. You opened
an attractive box which contained a CD and a small
manual. There was less than $10 worth of material in
the box, and yet you may have paid $300, $500 or
even $1,000 for the software.
You paid a premium, well above production cost,
because of the need the software fulfilled and the
benefits it would provide.
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| Calculate Your Value |
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The same is true for your product or service. How
much value do you deliver? Use these questions to
build your value:
How much can my product save my customer?
Savings may be in time, money or effort.
How much can my product earn for my
customer? Can you help them increase their
income; directly or indirectly? Does it create a
foundation for future opportunities or establish
valuable personal relationships?
What intangible benefits might customers
realize, and is it possible to quantify these benefits?
Will your product improve their abilities,
confidence, appearance or peace of mind?
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| Focus on the Benefits |
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Customers buy the benefits, the solutions to their
problems. If you can associate a dollar value with
specific benefits, you have a powerful message to
include in your marketing material and a solid
foundation to charge a premium price for your
product!
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| Looking for More Articles by Lorraine Ball? |
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Lorraine is a featured author on eZinearticles.com.
Here you can find a collection of her most popular
articles on marketing, networking, and creative
thinking.
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A twenty year veteran of corporate America, today
Lorraine
Ball helps small business owners use planning
and creative thinking as a starting point for growth
and change.
Active in the local business community, Lorraine is
the recipient of 2005 Rainmaker of the Year Award.
She serves on the boards of Rainmakers and the
Network of Women in Business.
Be sure to see Lorraine's presentation at the
Rainmaker Main Event, Tuesday, July 25th! For more
information go to:
www.gorainmakers.com
See Lorraine in Action
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