A good product is only as great as its availability. You can have the best idea in the world, but if you can not source its production and/or consumers can not afford it, it’s useless. That’s why it is paramount that businesses of all types do their due diligence to ensure that each product they offer is priced effectively, not only for the consumer’s sake but for their own bottom line, as well. Here are five signs your company could make use of quality pricing research:You Don’t Have a Clear Understanding of Your Customers’ Pricing Decisions
To understand product pricing, you need to understand the consumer decision-making process. If you don’t know who your consumers are, what they want, how, when and why they can or would purchase it, then you aren’t fully realizing your product’s potential.
You Don’t Know Where to Start
There are a lot of ways to gather quality pricing data, from direct pricing measures (i.e., “How likely are you to purchase a product at certain prices?”) to psychological testing (i.e., “What are your perceptions about the product price?”) to other more complex pricing research methods (i.e., questions that reflect many variables instead of one or two). And there are a lot of reasons to choose a certain price for a product that go beyond ROI. For instance, the value of your product as perceived by consumers is an important indicator of what they will pay to acquire it. If you don’t have a clue which factors are the most important or the best ways to find out, you certainly need to ask someone who does.
You’re Being Pulled in Too Many Directions
Targeting an entire market isn’t a sustainable strategy. If you find yourself trying to be everything to everyone, you are likely missing out on an opportunity to segment your pricing and hit smaller demographics with higher returns.
Your Sales are Through the Roof
While a high sales volume can be exciting, it could mean that your pricing is too low. You need to understand the maximum amount a consumer is willing to pay in order to maximize ROI. You can only know that if you conduct the right kind of pricing research.
Your Sales are Low
A lower volume of sales doesn’t automatically mean that something is wrong with your pricing research. After all, maybe you know that the higher price you’ve selected for a product is based on research regarding the ways in which consumers perceive its value. Thus, you might be selling less of an item, but your profits are more. However, if that’s not the case, you probably need to evaluate your pricing strategy for other factors affecting your low sales, such as you’ve priced your product so low that consumers are afraid that it’s of lower quality and choosing not to buy it.
Learn More
Picking the right price point for a product or service is an extremely important part of any business plan. If you need help figuring out how to get the information you need, contact our team at Communications for Research (CFR). We can help you gather data to effectuate pricing that increases your ROI and decreases your costs.
You may also check out our eBook, “6 Keys to Accelerate Growth with the Right Data Collection Partner,” to better understand how choosing the right market research firm can grow your business in sustainable ways.
