What Every Eye Care Professional Must Know About Pricing
Pricing is one of the most important decisions that an eye care professional or a practice manager has to make, yet more than half of businesses still underestimate the importance of having a pricing strategy. Less than 12% of businesses identify price as the biggest driver for future growth. The potential of strategic pricing directly affects the practice’s profitability and competitiveness. Setting prices too high will make you lose customers and business and setting prices too low will make your overheads greater than your profit and you may end up running a business that cannot afford to pay its costs.
Unfortunately, most companies are still not investing in pricing expertise, decreasing their strategic pricing potential, and getting involved in price wars and low and dramatic bad price increases. One of the pricing strategies that practices mistakingly think they are doing right is not talking to the customer about the price but rather using a set of tricks to reduce a potential obstacle to directly deciding on a purchase. Some of these tricks include tweaking price endings to distort perceptions or to signal a bargain. Using $9.99 pushes the customer to perceive the price as 9 and not approximately 10. Communicating prices with customers and explaining all the details in it is very essential in today’s increasing inflation.
Partitioned pricing consists of when a product’s price is divided into a base price and one or more mandatory surcharges like taxes, delivery charge, packaging price, and so on. As partitioned pricing has become more pervasive, customers started complaining about not being able to fully grasp or process all price information, and therefore they were led to underestimate total prices, which in turn influences their purchasing behavior. Recent research revealed that low pricing tactic persuasion knowledge subjects prefer the partitioned pricing offer over combined pricing.
Post COVID-19 inflation is caused by a shortage of supply and a high demand leading companies under pressure to avoid communicating raised prices. In all cases companies need to raise their prices; some strategies they can follow to increase prices intelligently include bringing about new and different customer experiences, bundling valuable features to their existing offerings, considering indirect increases, and adjusting their product mix. In all cases communicating price increases with customers is way better than using tricks to hide prices; It is also very important to consider other competitors before raising prices. Continue reading by subscribing for free.