Get All Access for $5/mo

Set Your Prices So It's a Win, Win, Win Not only should you charge based on the product sold, but also on what your brand represents to customers.

By Jim Joseph

Opinions expressed by Entrepreneur contributors are their own.

Pricing is difficult for small-business owners and marketers. You can never know if you've gotten it right. It's a strategic struggle for any brand.

I think it's because we constantly question ourselves about pricing. If you hadn't priced it so high, would it have sold more? Would it have sold any less if I'd priced it higher? Should I be higher or lower than my biggest competitor?

The questions are endless, with very few answers. Unfortunately, we have to deal with a lot of uncertainty in many areas of marketing and pricing is one of them.

Related: How to Set Prices When You're New in Business

I have a fundamental belief that I think holds true in any category or industry: pricing should be a win, win, win.

The customer

First and foremost, your customer should win. You'll never get anywhere with your brand if the customer doesn't feel like they're winning. Your pricing should reflect the value that they get from engaging with the brand, every time. You never want to leave them doubting whether what they paid was worth it.

Your distributor

When it comes to your pricing, all third-party distributors should win. If there's a middleman in your business model, then your pricing has to work for them too, otherwise they will drop you for the nearest competitor. Don't cut them out of your pricing model. Embrace them and they will embrace you. This includes your sales force as well -- anyone responsible for getting your product or service out there.

The business

When it comes to your pricing, you need to win too. This is your business, and you need to make a fair profit. Small-business owners can tend to feel guilty and give away the store. It's human nature but it's not good business. Price to make your business successful while balancing the needs of your customers and distributors where appropriate.

The brand

There's one more factor to consider as you map out your pricing strategy. In this series we've been discussing the difference between products and brands and pricing should be an area of great priority. As you determine how you want to price your product or service for a win, win, win, you should also consider the pricing from a product and brand perspective as well.

Related: Don't Be the Cheapest, Be the Best

When looking at pricing from a product point of view, you will most likely look at your direct competitors as benchmarks as well as what you think the market will bear for your product's features and benefits. That's a good start but it's only the beginning.

You should also look at pricing from a brand perspective, and bake into your analysis how your customers interact with your brand. Your brand has tremendous impact on your ability to price, so don't ignore it.

Pricing toward the brand can go in either direction: Perhaps your brand warrants a premium price, or perhaps you've positioned it as the low-cost option in the category.

Take a look at the coffee shop category. The price of coffee at Starbucks is very different than at Dunkin' Donuts or 7-Eleven. Each has taken into consideration their brand equity in determining pricing. The companies haven't only considered the product's role in pricing, but also the impact that their brands have on price perception.

Starbucks customers are willing to pay more for the Starbucks experience. Everyone wins.

7-Eleven customers are happy to buy coffee at a more affordable price. Everyone also wins.

Pricing based on the various brands in the category ends up creating a different hierarchy than if the pricing was based on the products alone.

You should do the same with your business and your pricing strategy. Take a look at it from both a product and a brand perspective, and find the right balance to make everyone a winner.

That way, you'll be winning too.

Related: How to Determine What You Should Charge Customers

Jim Joseph

Marketing Master - Author - Blogger - Dad

Jim Joseph is a commentator on the marketing industry. He is Global President of the marketing communications agency BCW, author of The Experience Effect series and an adjunct instructor at New York University.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.

Business News

You Can Now Apply to Renew Your U.S. Passport Online — But There's a Catch

The U.S. State Department officially launched the beta program this week.

Business News

Is the AI Industry Consolidating? Hugging Face CEO Says More AI Entrepreneurs Are Looking to Be Acquired

Clément Delangue, the CEO of Hugging Face, a $4.5 billion startup, says he gets at least 10 acquisition requests a week and it's "increased quite a lot."

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.