Pricing a service is a lot more difficult than pricing a product. Most business owners use a variation of cost plus pricing. What is Cost-Based Pricing? Cost-based pricing is the oldest and most common approach to pricing services. In this method, all the various costs are a...
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People, including your clients, are clueless about price. They are not even sure if the price you have given them is reasonable or not. This isn’t a mere claim, science actually proves this. How do I know this? Research in a branch of science called psycho-physics, has sho...
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Should it be based upon on a percentage of your turnover? Or the amount of time spent on your affairs? Or should it be in line with what their competitors are charging their clients? The answer is: It depends. It depends on the role that your accountant plays as this varies ...
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Kids are back to school next week.If you have children in private school, that big invoice for the first term will be due for payment. Bank of mum and dad is set for an assault yet again!As much as private education is an investment into a child's education and future, the p...
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Let’s start with one of the most profound principles in the field of pricing.  And that principle is, different customers value things differently. We all value things differently.  We all have a different perception of the value of any product or service.  ...
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Pricing is always complicated with the presence of competitors.  You have to consider the quantitative effect on your sales arising from any change your competitor might make to its pricing, and how a competitor will respond when you change your pricing. If your competi...
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When you look at the most successful businesses in any sector, whilst there may be one or two that are successful using a low-price strategy, the majority are premium high-priced businesses, such as Apple, Starbucks and Disney. Despite that, and even if you acknowledge that ...
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One of the biggest problems is discounts being given by employees and sales people indiscriminately.  Very often they are given with little or no senior management involvement or authorisation.  There needs to be better systems, training and communication. If you ...
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What cost takes up the biggest share of the annual sales of almost every business (and it doesn’t appear in your annual financial statements)? Price discounts. Annual financial statements for any company report sales net of discounts and promotions.  That means the co...
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There are really only two pricing strategies: Low-cost leadershipHigh-price differentiation Everything else just falls somewhere in the middle. In fact, most small businesses don’t have a pricing strategy.  They often use what I call, emotional pricing; reacting to gu...
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