Your website is getting thousands of hits a day, and customers are banging down the doors. But how do you know what to charge?
You’re not the only one with this problem. Large companies also struggle with this issue. Professor Kent Monroe of the University of Illinois, Urbana-Champaign, says that across the U.S. price setting has been sloppy and that the common instinct to match prices to cost is foolish. Even investigating historical trends can’t accurately determine pricing.
So how do you do it?
If you are a bigger small business, you can hire professionals. Researchers can perform discrete choice analysis, meaning that they ask participants to evaluate prices assigned to goods and services. However, this method is costly.
A cheaper alternative: talk to your employees and customers. They know what customers want, and you can set your pricing accordingly.
Consider selling your goods at different prices to different customers. Audiences have different demands based on their environment and income. Businesses don’t lower their prices for students and seniors just to be nice.
More at:http://www.fastcompany.com/online/68/pricing.html
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