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2 How to Know If Your Prices Are Alright

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I argue throughout this book that a business owner must see his or her business as a struggle of perception. Customers strive to reduce everything to the most easily comparable state — apples to apples — and that means dollars per unit. A business must strive, on the other hand, to stop this from happening by presenting itself as pomegranates. If successful, then the customer cannot reasonably make a comparison on price only. Create a perception in the customer’s mind that the business, product or service is different, and long-term business success can be yours. Create differences that actually have value in the mind of the customer. Throughout this book there are examples of perceived value and how it can be converted into better prices and better profits.

Before we can pursue that topic, however, we need to know if pricing is an issue in your business. In this chapter, I have highlighted a number of ways to see if your prices are too low. In the appendices, I have added sections on the math calculations to confirm this judgment and to help you measure the impact that pricing your product or service too low can have on your business.

Pricing Strategies for Small Business

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