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Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant, + Website by Marlene Jensen

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Chapter 11

Testing Prices

image In-a-Rush Tip
Don’t skip this critical chapter!

When you reach this chapter you should now know:

  • Prices buyers are proven willing to pay for a product with your positioning and your benefits and negatives
  • Your costs
  • That you can earn an acceptable (hopefully great!) profit given the prior two points
  • That you have considered buyer psychology in setting the actual numbers
  • That you now have three to four very good prices from which to choose

What you don’t know, however, is that you are at a dangerous point in determining prices. A point where you could lose a lot of money! See the next section.

The Psychology of You—in Setting Prices

The problem is, you already have a strong feeling that one of your three or four prices is best. Am I correct? And you’re feeling this very strong urge to just run with that price.

There is too much money at stake for you to give in to that urge. You need to “test-drive” your three or four choices and let buyers tell you which one is best.

People buy for a lot of reasons, most of them focused on the product. Often the price is a very minor consideration. If you don’t test prices, you will blame any poor performance in sales on your price—when it very likely won’t be that at all. So you’ll waste a lot of time spinning pricing wheels when you may need to adjust part of your product.

Example:

  • Suppose you set a price of $75 ...

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