You may already have in mind which pricing strategy you plan to use, but if you’re looking to expand your business and try out some new marketing strategies, there are many different types of pricing strategies to try. Here are seven of the most popular types of pricing strategies and how they could help your business grow in both the short term and the long term.
1) Straightforward pricing
Straightforward pricing can be considered an effective pricing strategy. This is one of the easiest and most popular strategies out there. It doesn’t have any hidden costs or caveats, so it’s easy for customers to understand what they’re getting and how much they’ll pay for it. What they see, is what they get. It’s also a good idea if you want to limit your customer base because straightforward pricing means that only people who are willing and able to pay the price will be able to buy your product.
A discount pricing strategy is a marketing technique used by companies in order to encourage customers to buy their products or service. It can be a great way for startups with limited funds to build a customer base, as well as for established companies who want to increase sales.
Here are some examples that touch on providing Discounts in your business:
- Price Bundling: Combining two or more products and pricing them as one. For example, buy a TV and get a DVD player for free.
- Rebates: Offering rebates that provide discounts on the product or service. For example, buy an item and get money back in the form of a rebate check or credit card statement.
- Trade-Ins: Trade in your old product with another company for new products at discounted prices. -Discounts: Offering discounts on the product or service for certain periods of time only – usually around holidays like Black Friday, Small Business Saturday, Cyber Monday, etc.
This list of pricing strategies should give you some ideas on how you could use discounts in your marketing efforts. If you would like more information on these strategies, feel free to contact Hot Dog Business Growth today!
3) Tiered pricing
Pricing strategies can be based on various factors, such as the type of product or service and the market. One common pricing strategy is tiered pricing, which offers different prices for each level of a product or service. Tiered pricing allows businesses to segment their customers so they can offer something at every price point. For example, a business might offer a $10 package that includes only one item, or they might offer an $80 package that includes all six items in the line. The more expensive package would be marketed towards people who want every item in that particular line while the cheaper option could be marketed towards people who are just looking for one specific item in that line.
Auctions are a great way to get people excited about your product. One way is through auctions for one-of-a-kind products or rare finds. In an auction, the first person who places the highest bid wins the product. This is a great strategy for marketing because it allows you to sell your products at higher prices and give away free products in order to drive up demand.
5) Bundle pricing
The bundling pricing strategy is a way for customers to get more than one product for the price of one. This strategy can be used in any industry, but it’s most common in the software and app world (SAAS). Let’s take a look at how this strategy works:
Customer X purchases Software A at full price.
The customer gets a free copy of Software B.
The customer pays $0.00 for Software C.
The customer has bought three different products and paid only once! They get more than they expected and walk away feeling like a winner.
This is just one example of the bundling pricing strategy, which can also be used with services or physical goods.
6) Subscription-based pricing
Subscription-based pricing is a pricing strategy in which customers pay for access to your product or service on an ongoing basis, usually with a fixed cost per period. For example, Hulu charges their subscription customers $6.99/month.
This type of pricing strategy allows you to collect revenue as often as possible and provides a predictable, dependable stream of income.
The downside? Customers can cancel their subscriptions at any time, so they’re not locked into your product like they are with other types of pricing strategies. It’s also difficult to predict how many subscribers you’ll have in the future; not having a set price point means it’s harder to budget for overhead expenses and other business costs that may arise.
7) Long-term pay
Different pricing strategies are used for different types of products and services. The following is a short list of the different strategies and examples:
- Cost-plus pricing strategy: This strategy includes adding up the costs associated with producing a certain product or service and then adding on a percentage for profit. For example, if it costs you $1.00 to produce an item, you would add on 30% profit (or $0.30) and charge $1.30 per unit sold.
- Penetration pricing strategy: This strategy is often used by companies who have less competition in their market space because they are trying to attract new customers with low prices in order to increase the company’s market share by getting people hooked on their products or services.
Whatever pricing strategy you choose, it’s important to consider them all. Perhaps you can use them all throughout the course of a year, and test out the best methods.
For more information on the right pricing strategies for your business, contact Hot Dog Business Growth Today!