“Perceived value-based” pricing is pricing for a product or service at a level that reflects the potential savings, the highest satisfaction level, or the maximum use that a client will receive from the purchase and the use of the product or service.
Overall, a perceived value-based price is set at the highest level that your target market is willing to pay, given these benefits. This type of pricing reflects a sustainable competitive advantage where there is little or no competition. This is niche market heaven.
However, be sure that your competitive advantage is real and defensible, or you have got trouble on the way. How much is too much to charge, when utilizing perceived value based pricing? Look for tear stains on the checks you receive from customers. If it hurts them to write you a check, then you are charging too much. If that is the case, you won’t keep them as customers for long.
An indicator that your pricing is accurate would be referrals—if you are getting referrals, you are priced fairly or you have an opportunity to increase prices. If your customers complain about pricing and leave, you have priced too high or you are not delivering the promised value proposition.
Pricing should be fair for both buyer and seller.
John Bradley Jackson
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