Pricing your products and services is one of the most critical decisions you\u2019ll make, but there\u2019s far more to consider than supply and demand, the Inc.com article \u201cIs the Price Really Right? 5 Ways to Tell\u201d explains. Consider these variables to decide if your pricing structure could use some refreshing:<\/p>\n
Know your value proposition.<\/b><\/p>\n
Before you consider outside influences, first ask yourself, not considering competition or other external factors, what is the value of the products and services that you provide? Be honest!<\/p>\n
Know your customers.<\/b><\/p>\n
Even if your offerings are worth a certain amount in a vacuum, it doesn\u2019t matter if you don\u2019t have access to plenty of customers who are willing and able to pay for it.<\/p>\n
Know your costs.<\/b><\/p>\n
You could make all the sales in the world and still lose money if you aren\u2019t considering all your your costs. Sunk costs, labor, products, equipment, cost per customer visit\u2026break it all down so you\u2019re sure that you\u2019re at least covering the cost of providing a specific service.<\/p>\n
Know your competitors.<\/b><\/p>\n
While it shouldn\u2019t be your first concern, your competitors\u2019 will always impact yours to some degree. Just don\u2019t make the mistake of getting into a pricing war. The key is to provide the best value, not the cheapest price. Don\u2019t try to copycat \u2013 try to differentiate and fill a need in the market.<\/p>\n
Know the seasons.<\/b><\/p>\n
Seasonality is a huge factor, especially in this industry. Just because you\u2019re profitable during peak season doesn\u2019t mean it\u2019s going to be enough to make up for potential struggles in the off-season. While it may results in lower margins during prime season, pricing that incentivizes clients to keep their membership could be your best bet.<\/p>\n