How the Price You Charge and Your Brand are Indeed Connected
Pricing is more than just the sales price; it also includes how your products and services are packaged. There are many pricing models out there—some work better than others and some work better in some industries than others. What’s important is that it fits with your business model, convinces your clients to buy, and gives your clients confidence in your brand.
A client had a yearly subscription model, however, over half of their clients were leaving after three or six months and then would return and repeat this pattern every three to five years. The goal was to get clients to stay, but the company gave away the most valuable services for free, so there was no real incentive for them to stay.
Let’s practice listening…
The first issue here is that the company was not listening to its clients. Their clients were telling them what they wanted and what they valued. Listening to this feedback would create more revenue and more satisfied clients.
Second, the company was leaving a lot of money on the table by not considering other pricing options. Pricing is a powerful growth lever that can help you meet your business goals. In this situation, a good, better, best pricing strategy gives clients the opportunity to come in at one level, and then grow. This can dramatically increase your revenue if done correctly.
Third, there were unrealistic expectations on behalf of the company. They believed that everyone had the same needs and that doing business with them this one way was the only solution. The subscription needed to be repackaged in a way that made it easy for a prospective client to say, “this package is for me” or even better “yes, I’ll sign up.”
Just Give Me the Results.
Your pricing strategy helps shape the reputation of your brand.
Businesses in different stages of growth need different strategies for evaluating their pricing. Additionally, every business has a unique set of potential selling points and a unique target audience to pitch to. If your clients are willing to pay, create different options to accommodate their different needs. This sounds obvious, but it's rare for businesses to put much effort into finding the best pricing strategy. If you optimize your pricing strategy so that more people are paying a higher amount, you'll end up with significantly more revenue than a business that treats pricing more passively.
Brands send powerful messages through how they price their products and services. Pricing can generate emotional responses and convey messages that validate if the brand is affordable or exclusive. It’s a symbol of who you want to include, expresses where you want to be positioned in your market, and who you intend to compete against.
We restructured their pricing model and offerings to accommodate those shorter subscription cycles. Clients could now choose between a three-month, a six-month, and a one-year package. As this was an affordable brand, we kept the one-year package the same price and had higher (but still lower than the one-year) costs for the shorter subscriptions. This almost tripled revenue within the first three years.
Download our free eBook, Hidden Truth About Why Your Marketing Doesn’t Work to learn more.
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