Why is pricing important for my business?

Why is pricing important for my business?

William A. Cohen (Author & Founder, Institute of Leader Arts) gives expert video advice on: How do I determine what to price my product or service?; What is a "price margin"? and more...

First thing: because of sales. As I mentioned, even though you think if I go low I will have more sales, it's not necessarily true. It is like a doctor. If you have the money, are you going to go to the cheapest doctor? I don't know. The guy is liable to charge anything. I don't know. If I am desperate, yes, but that is an important thing. It depends on how much sales you have. Off course it is going to effect your profits, how much money you have to invest in other things. How you respond to a competitor has to do with pricing. Pricing is one of the quickest things we can do. You have to be careful about cutting the price for example. That's where you get into things like coupons and discounts and so forth. That way you can preserve your basic price even though you are really cutting that 25%, but you can always return to the original price.