, 

Let’s talk about pricing. 

Pricing is a topic that a lot of business owners get uneasy about. And with good reason. 

Especially because everyone responds differently to pricing. 

Have you ever been in a situation where a customer asks for the price of a product and then goes ahead to pay without even haggling or pricing it. 

Then you now start wishing you had mentioned a higher price so you could have made money. 

We’ve all been there. 

And then there are other situations where you state the price of a product to a customer and they either: 

• Make an argument to water down the value of the product, 
• Question the logic behind your pricing system, 
• Or flat out just offer to pay a tiny slash of the entire value of the product. 

Same product, same price, but different responses from different kinds of people. 

This creates a problem of pricing and the question of which price is too high and which is too low?

I’m pretty sure that you must have faced this problem in one way or the other and in whatever industry you have played in. 

Unless the prices of those products are fixed. But even then, some people still set their own prices. 

So how do you solve this problem?

Here’s the first thing I need you to understand about pricing. 

There is no such thing as a “wrong price”. 

Every price is right, to the right person. 

The price of a Rolls Royce to you (and me too) might seem outrageous for $400,000 (over N700 million). But to the right person, it’s the right price. 

Same way an oxygen tank to you is worthless, but to the family of a dying patient is worth whatever the hospital says it is. 

As humans, the price we place on anything is dependent on its value to us and how much of that value we perceive. 

Along with a couple of other factors, like location, packaging, aesthetic value, and the financial status/purchasing power of the person in question, or of your target audience. 

So when you want to place a price on that item, don’t just price it anyhow or reduce your price anyhow because “people will say it’s expensive”.

To the right set of customers, that “high price” is the reason they will buy, because if the price is that high, then it must have high quality. 

What you should focus on instead is creating the right conditions — great packaging and aesthetic value, effective marketing, proper targeting, et cetera — to make your price appear believable and logical. 

That way, when you mention your price, your voice and hands won’t be shaking, scared that the customer is going to just run and leave. 

There’s a balance to this though. 

Because in my case, for example, in the hostel, there are very different kinds of people. 

Rich, middle class and struggling. 

Then there’s also the fact these buyers have different temperaments. 

Some of them might know the worth of the product, but still attempt to haggle, to get a bargain. 

And that’s okay. 

I mean, who doesn’t love a great deal?

So, sometimes, you have to shift your ground and meet them in the middle. 

The important thing is that you stay true to your belief in your product, be empathetic to your customers, and most importantly, make sure you stay profitable. 

Because at the end of the day, that’s why you’re in business. 

To make profit. 

Did this email make any sense to you or not?

Let me know. 

See you in the next one. 

— KD™