By Julie-Ann Simpson
Many entrepreneurs and businesses sell their products or services at unreasonably high prices. Price gouging is when a retailer and others who provide service increase the price of their product or service that is considerably too expensive for the buyer. Rachel Bakely-Gray provides a description of how each state defines Price Gouging in her article. This method not only chases potential clients away, but it stagnates your success growth. Your competitors may be using the same strategy, so it makes sense to meet your audience’s needs by investing time in doing research. Get to know your audience!
It is wise to research your audience, age, demographics, employment, interest, and need. If you want your business to grow, you need to answer the need of your audience and be more aware with your pricing. When you have the attention of your audience, you can potentially convert that audience to customers. Price fixing according to the Federal Trade Commission is illegal. Price fixing is an anticompetitive agreement among retailers, sellers and or manufactures to either low, increase or have a fixed price on the product or service. Click on the link to read more about the fix pricing and how the FTD protect Amercian Consumers. Like the price gouging, it is unfair and unreasonable to manipulate the price only for your own benefit. By overpricing your product, you are doing your own business an injustice when you do not research your audience.
Be mindful of the time we’re living in and the current events. We are still in the pandemic. Many have lost their jobs, have financial obligations such as student loans, mortgage payments, car insurance, and other expenses to pay, so an overpriced product will not appeal to them. Greg David recently shared in his article NYC lost a record 631,000 jobs to the Pandemic in 2020. So what’s next?
You need to offer a product that is affordable and reasonable for your specific audience. The keyword is the audience. You must know your audience. It makes no sense to present a product priced at $5000 to an audience struggling financially. Be mindful that it is hard on most of us now. A $5000 product would be fitting for an audience who is secured financially. This strategy is not only selfish, but it will reduce the likelihood of attracting more audience and converting them into customers. You will succeed in getting more people to buy your product if the price is reasonable to both you and your audience. How much profit can you expect to make if your product exceeds the budget of your audience? It is wise to research your audience, age, demographics, employment, interest, and need. It is not that you do not have an audience or that your audience does not want to support you. Are you making it possible for your audience to be supportive? You have created a free webinar, you have given some freebies, you have built your email list, your audience showed up, but your price was too high for them to help you reach your target goal. Be realistic.
Here’s why your business is not growing as you would like it. You either have the wrong audience, or your price is outrageous. Engage with your audience on social media, listen to what they have to say, and explore ways to meet them halfway that will benefit both you and your audience. Create marketing strategies that appeal to your audience’s emotion and budget. You will not know their budget if you don’t know your audience. The customers you are looking for are among your audience.
You don’t need to undervalue your product, but you need to be realistic with your pricing. Don’t expect Louis Vuitton clientele to be the same as Target clientele. Both are successful establishments that meet the specific needs of their customers. Some customers will shop at both establishments, but a select group will shop only at one establishment because it meets their expectations. Having a clear understanding of who your audience is will boost your success rate sooner than you expected.