The constant goal of pricing is to set prices high enough that they accurately represent the value of your products and services, while low enough for customers to actually afford them and feel good paying what you’re asking.

 

When monitoring your prices, my advice is to exploit any market advantages you might have, improve the overall decision-making process and pursue all pricing options proactively. Here are some suggestions:

 

1. Share responsibility for pricing between sales, finance and a fully informed management staff—even if you are a one-person company.

2. Develop high-quality data on true net profitability of both the company and your customers.

3. Look for price opportunities on an individual product-line basis, rather than across a range of products.

4. Seek superior strategies by managing customer information, exploiting structural advantages and through innovation and leadership.

 

Price decisions are too often made by too few people. Only by sharing the responsibility for pricing can managers begin to understand the importance that pricing can have on the success of a business.

 

Ultimately, decisions on pricing must be measured against other critical factors, such as data on customers. In the final analysis, pricing can be an exercise in both innovation and leadership.