Welcome back to the ProfitSchool podcast Business Unfiltered with Mercer and Jeff Sauer today's topic is How to Price Your Products.
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Supply and Demand: Mercer and Jeff explain how pricing isn't just about charging more - it's about understanding market dynamics and finding the right balance between supply, demand, and profitability.
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The Profit Formula: They share a practical approach to pricing: calculate your costs, double it for unexpected issues, then multiply by 3-4x to create the necessary margin for marketing, taxes, team bonuses, and business growth.
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Value Communication: Price is a conversation between your company and the market about value exchange. Success comes from helping clients understand and agree with the value you provide.
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Market Alignment: Different markets expect different price points - the same service might need to be priced 10x higher for enterprise clients versus small businesses, simply because of market expectations.
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Recurring vs. Project Pricing: The benefits of recurring revenue models over one-time project fees, including the ability to recover from initial setup costs and build long-term profitable relationships.
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Price Increase Strategy: The importance of graceful price increase communications, with real examples of both successful and unsuccessful attempts at raising prices with existing clients.
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