When To Charge a High Price

Struggling with pricing your products and services? Many business owners charge less than they could. Often this comes down to lack of confidence rather than concrete factors that should affect price. If this sounds like you, there are certain market situations that lend themselves to charging high prices. Read on and consider which ones might apply to you and your business:

Do you offer a product with high value?

The product provides the solution to a painful problem. Customers value the product very highly because of its functionality or other benefits.

Your customers can afford it

Does your target market have an above average disposable income?

Lack of competition

The less competition you have the less choice there is for the consumer. Lack of competition keeps prices high.

High demand

When demand outstrips supply, higher prices can be set. Think of hotel prices during festivals and other large occasions. Demand is high ensuring that people will be willing to pay.

Emergency or pressure situations

If your car breaks down and you need to get somewhere urgently then the cost of a tow truck is not the top priority, securing the truck at even a high price will bring relief. People will be willing to pay a premium for a bottle of water or an ice cream on a hot day. In these situations you can charge a higher than normal price for fulfilling and urgent need.

Think about your own business. Do any of these factors apply? Should you charge more?