Each business sement and separate product line has its lessons to teach about pricing. Pricing is crucial since it sometimes defines the value that your products are worth for your efforts and for your customers to buy them. A good starting place for pricing decisions comes from Cost-Based Pricing, Value-Based Pricing, and Competition-Based Pricing.
This article was prompted by some of the author’s recent experiences in the publishing business. There are apparent situations when considering pricing, and the three guidelines to use would be cost, value, and competition. However, the real revelation here is the paramount importance of value. Value can stand alone if relevant to a buyer's need, empowering you to make informed pricing decisions.
Often, important decisions like pricing find that traditional guidelines for pricing decisions and loud voices from industry pundits promoting ideas supported by their personal opinions offer narrow and sometimes malicious advice and opinions.
When I wrote this, I checked the definition of pundit and found it to be “an expert in a particular subject or field who is frequently called on to give opinions about it to the public.”
In the publishing business, authors make pricing decisions about the sales price of their books. This can be challenging enough to decide whether cost, value, or competition should influence the decision. Still, an example of where a pundit has put a spin on the subject and just created confusion is too common.
Medium is an American online publishing platform. In a recent article, a reader explained her hesitation in buying self-published books, which became a conversation about price points.
The reader explained that she hesitated to buy self-published books and said the reason was tied to seeking value and feeling that self-published books were generally priced too high. She supported that, claiming that she had bought two recent books for $11.50 and compared that to a self-published book priced at $20.50. She added that the two books were from known authors and the expense, besides being self-published, was by an unknown author.
This is a stark example of how harmful generalizations can be. A simple consideration of cost, value, or competition does not warrant the addition of generalized assumptions about self-published or well-known authors. It's crucial to be cautious and aware of the potential negative impact of such generalizations..
The bigger problem is that using this generalization can lead to self-published and unknown authors concluding that they must be lower in price and ignoring their potential focus on content, value, and competition.
Pricing for books and many products has much to do with value. Customers will come back for products over and over that have valuable content but will disappear if disappointed, regardless of the method of publishing or the author’s name.
An important conclusion for any discussion about pricing isthat there is a significantt difference between cost and value, and the price usually falls somewhere between the two. However, pricing is not dependent on competition and costs if the value is accurately assessed and focused on the right buyers. This should reassure you and give you the confidence to focus on value in your pricing decisions..
