At McLellan Marketing Group, we talk to clients a lot about their pricing strategies. At first, they don’t see it as a marketing issue. "It’s an operations issue," they tell us. Cost of goods, profit margin and voila — there’s your price. Right?
How you are priced, both in terms of where your prices fall in the marketplace and also the structure of your pricing, tells your potential customers a great deal about you. Seth Godin, in a recent post, suggests that you can be cheap or you can be better.
While I don’t disagree with Seth, I don’t completely agree with him either. His logic is simple. If you are of a better quality, you can be more expensive. If you stink or are mediocre, you need to be cheap. That feels like a sucker’s choice to me. While what he suggests is true, it is not the only truth. Frankly, I think you can be of marginal quality and position yourself to be expensive. If you’re cool enough, you’ll be able to command a high price tag. And visa versa. You can be great and still decide to be cheap.
My point is not to tell you what your price point should be. My point is to tell you that you should purposefully decide, from a brand perspective, what your price stragies should be. Do you have a pricing strategy? Can you articulate it?
Let’s talk about pricing structure in the next post, eh?