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Competitive Edge
Creating your Unique Value Proposition to gain your Competitive Edge.
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The Top 10 Pricing Mistakes Companies Are Making | TechCrunch

The Top 10 Pricing Mistakes Companies Are Making  |  TechCrunch | Competitive Edge | Scoop.it

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Price strategy is emerging as a critical path for companies to increase their competitive advantage, and bottom line. Many companies have spent years..

Price strategy is emerging as a critical path for companies to increase their competitive advantage and bottom line. Many companies have spent years achieving gains through cost cutting, outsourcing, process re-engineering and adoption of innovative technologies. However, the incremental benefits from these important activities are diminishing, and companies need to look at other areas to improve their business results.

Today, companies are looking to serve well-defined market segments with specialized products, messages, product variants and services, and to earn superior profit margins while doing so. All too many companies, however, use simplistic pricing processes and cannot even identify their most profitable customers or customer segments. The following is a list of 10 of the most common mistakes companies make when pricing their products and services.

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Marc Kneepkens's insight:

Pricing is an art, this article will outline some essential elements.

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Is It Time To Rethink Your Prices? Yes, If You Want To Build A Sustainable Business

Is It Time To Rethink Your Prices? Yes, If You Want To Build A Sustainable Business | Competitive Edge | Scoop.it
Startups and small businesses have a habit of setting their prices low in order to attract customers. The problem is, it’s simply unsustainable. These entrepreneurs end up working as hard as they can just to stay afloat. In extreme cases, a business actually loses money with each new sale.

Your prices. Nothing has a bigger impact on your business’ sales, health, and bottom line. Set your prices too high, and your products or services won’t sell. However, according to analyst firm McKinsey, lowball prices are a far more common problem for businesses. In fact, they’ve found that upwards of 80% to 90% of all poorly chosen prices are too low.

It’s easy to understand why this phenomenon happens. Startups and small businesses have a habit of setting their prices low in order to attract customers. A brand new consultant might offer heavy discounts to win business and build a portfolio. Then, she never readjusts her prices back up to market rate. A web startup may keep a feature free for far too long, even though it’s clear that people are willing to pay for it.

These businesses face a similar future: they continue to win new customers, clients are happy, and their business is humming along busier than ever before. The problem is, it’s simply unsustainable. These entrepreneurs end up working as hard as they can just to stay afloat. In extreme cases, a business actually loses money with each new sale.

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Get your Free Business Plan Template here: http://bit.ly/1aKy7km

Marc Kneepkens's insight:

The first tips says: "Sell based on value, not just price". How true is that? You'll never go wrong following that rule. Don't undercut yourself and your hard work.

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