How to Create the Perfect Product and Pricing Strategy for Your Business
Micro and Side Hustle business owners often think they don’t need to waste precious time on a specific product and pricing strategy
Why bother, when your business consists of just you, and maybe one or two others?
You haven’t got an overly complicated, ever-changing list of products and services to keep up with, so why would you need a product and pricing strategy, anyway?
Especially when it’s so easy for everybody to understand exactly what your business does, and what it offers.
In previous posts I have focused on the growing need to nurture your customers. No matter how small your business, the customer experience you offer really matters. In today’s crowded business markets, going the extra mile (such as personalising your customer interactions) can give you a much-needed competitive edge.
The same rules apply when it comes to positioning your products and pricing what you sell.
Your business may be micro, but its potential impact is macro.
Because you’re offering products or services that have the power to make a genuine difference to the right people.
The right product and pricing strategy will help you reach those people, at a price that:
a) they’re willing to pay, and
b) ensures your business is successful (which means it will make you money!)
Isn’t that worth spending precious time on?
Creating a Product and Pricing Strategy That Works for Micros and Side Hustlers
A good way to start your strategy is by asking yourself the following questions:
1. What Am I (REALLY) Selling?
The answer may seem so obvious to you, that you could be tempted to skip the question altogether.
But before you do, try thinking beyond simple answers like “I teach yoga”, or “I design web pages”
Instead, what are the specific benefits – the outcomes – your customers get when they work with you?
In the war between features and benefits, benefits win every time. That’s why the best marketing campaigns have moved away from standard USPs (Unique Selling Points), in favour of UPBs (Unique Perceived Benefits).
So if you teach yoga, some of the benefits are likely to include improved flexibility, better sleep, and the ability to cope more easily with stress. Remember that it’s benefits like these that your customers are really buying.
Don’t attempt to convince customers to buy into something. Our customers have a problem we can solve; they are buying their way OUT of something
Remember too, that YOU are likely to be a huge factor in your business offering! It’s often hard to separate a micro or side hustle business owner from the products or services they sell, because they are so close to them.
That personal touch is often a genuine advantage in business, so make sure your own values and approach are at the forefront of your business and your marketing. This will help separate you from your competition, as well as giving potential customers some insight into what they can expect when they work with you.
2. Who Am I Selling to?
(Hint: the answer isn’t “everyone”).
I’ve covered ideal customer profiling in previous blog posts. To summarise, your products or services will be a natural match for a certain type of customer.
Your mission is to find them!
3. Do My Customers Want What I’m Selling?
“Of course they do” I hear you say “I love it; it’s my passion. Of course other people will love it and want it!”
It’s not that cut and dried I’m afraid.
Once you’ve identified your ideal customer group, it’s time to get researching. You have to find out if they actually want what your business offers.
The best way to do this is by asking.
- You can use polls and questions on Facebook, LinkedIn, Twitter etc
- You can find out where your ideal customers tend to hang out, then go there yourself
- You can use anonymous surveys so people feel they can be really honest
- You can organise focus groups
- You can stand on a street corner with a clipboard and some questions …… And so on
You should listen to, and acknowledge, the feedback you receive – even if it’s something you don’t want to hear.
Nobody wants to be told they have an ugly baby. It’s hard to hear criticism about our business, but critical feedback is essential to business success
One point. I recommend you avoid including your friends and family in your research.
They generally fall into two camps. They are either extremely supportive and encouraging, which is great for your ego; or they just want to know why you don’t go and get a proper job? Neither response is at all helpful!!
4. How Much are My Customers Prepared to Pay?
If you understand how much your customers might be willing to pay for your products or services, you can feel more confident about your product and pricing strategy.
I’ve seen far too many micro business owners price their offering based on nothing more than their own perception of what they think people might pay or (worse) a few ££ less than their closest competitor.
In most cases, this is far too low!
So if you can, find out what customers are already paying for similar products or services. If you discover a range of prices, try to establish what aspects separate the higher-priced options from the lowest.
This will help you determine where your own products or services should sit in the marketplace – and when it might be time to put your prices up!
I’ll be going in-depth on products and pricing over the coming weeks. So please share any questions or comments below, and don’t forget to sign up to my weekly newsletter so you don’t miss anything!