Perceived Value Pricing is the best choice for niche marketers (most of the time).
This pricing strategy is defined as pricing 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/or of use of the product or service. Overall, 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 and where there is little or no competition. This is niche market heaven. But, 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.
Better yet, referrals are a great indicator that your price is fair.
John Bradley Jackson
© Copyright 2009 All rights reserved.