Monitoring Your Pricing Strategy – It's difficult for any business to get their prices right the first time, no matter how well they know their customers, understand market conditions and calculate their own costs. As you roll out your pricing strategy, you will need to monitor your profits regularly and evaluate whether the prices you chose are appropriate or not. Key indicators to do this include:
Financial Statements – Keep a keen eye on sales and examine your financial statements carefully. Make sure that you're reaching the sales target you expected when you set your prices. In addition to looking at your overall sales results, also consider each product individually so that you can see whether its sales are lagging... potentially due to inappropriate pricing.
Costs and Your Bottom Line – Consider each fixed and variable cost to determine how it affects your bottom line. See if there are ways to manage costs so that you can offer the right price that will earn you enough profit. One of the largest costs to consider is labor, which you'll want to watch to see if they're increasing or decreasing. Ideally, they should remain stable over time.
Customer Feedback – Get regular feedback from your customers about pricing. Take every opportunity you have to interact with your customers and get their feedback on every aspect of your business, especially pricing. Make it an ongoing part of your business operations.
Watch Competitors – Even after you've set your pricing, keep an eye on the competition and look for changes in their pricing and marketing. Monitor what your competition is selling and at what price. Try to glean what kind of sales your competitors are having. Try to gain feedback from your competitors' customers. One way to do this indirectly is to read online reviews and comments written by customers about your competitors'.
Continued Testing – Whenever you have an idea for a new price, offer or tactic, test it. You can test new offers and prices on new customers, as well as using A/B split testing. This is where you offer the same product at two price points to two different markets to see which outperforms the other.
Remember that pricing your products is one of the biggest decisions you’ll make – with a great deal of impact on your business. It's also something that's ongoing. Once you set prices, continue monitoring and experimenting with adjustments.