I don't know if it is the stirring effect of launching new product types or the slightly erratic indicators in the economy, but for the last few weeks our office has been abuzz with talk of pricing (just this morning I was sent this post on pricing digital content that is well worth a read); and it's not just us.
So many of the conversations I have with people nowadays, from closest friends to chance business encounters revolve around it. What will people pay? What would we pay? Are we paying too much? Have our recessionary pricing strategies had a damaging effect?
In the post link to above, Chris Brogan advises against asking your community what they will pay, because they'll low ball it. A valid point; if you're asking, I'm negotiating because you've signalled that there's room to do so.
So how to solve our pricing dilemmas? This is by no means the only approach but it is the one I'm going to try:
1) Find out how much they are paying (competitor research, surveys, market research)
2) Then comes the painful bit - testing. To my mind, the only way you can be really sure of how much your customers will pay for something is to put together a decent message that accurately conveys the value of your product and see if people will pay the price you ask.
The pain bit comes with the fact that you are probably going to have to get this wrong a lot before you find the ideal level to generate the most profit in the long term. Ah well, no pain, no gain as I'm sure you all said as you hit the gym last month!
