Pricing Choices

As I develop my business, the issue of pricing always comes up. How much to price? What to price? Fixed pricing? Dynamic pricing?

One aspect of pricing I notice is when there’s only one high price for a product or service, it’s basically an ultimatium. Take it or leave it!

I never realized this because in daily life - almost all things have a single price.

Grocery Store

Imagine going into a grocery store and seeing multiple prices for the same product. You either buy the product at that price or leave it. Right?

You are never shocked at the price there - why not?

Because pricing is lower and for a single product, there’s multiple varieties: size, brand, competitors.

There may be a single price - multiple options. Items in a grocery store are a commodity.

Custom Services

When pricing out a custom service at a higher price point, that is a different story. Comparing them becomes harder - worse yet, uncomparable because of the service.

With only a single price for this that’s high enough to make you wonder, the single price is essentially an ultimatium.

Either get what you want or nothing at all.

There’s nothing in-between.

Or Is There?

How can high priced custom services be comparable like a commodity without becoming a commodity itself?

There is a way high priced items create comparison without leading a potential buyer to a competitor is to offer different price points with varying options.

Varying options will differ on the product or service.

With a product: speed of product, accessories, storage, size, etc. With a service: response time, additional follow up, guarantees, etc.

Each of these would have different prices.

Instead of having a buyer decide on a single price, they decide how much of the product or service they want. They compare, like a commodity, within the provided offerings - all the from the same company.

That’s how pricing can go from an ultimatium to comparable without becoming a commodity.