Effective pricing strategies for business success

One of the secrets to business
success is knowing how to set
the best prices for your
products. If you set your
prices too high, you may scare
away customers and favour
your competition. If your
prices are too low, you may be
losing profits and running your business at a loss.
The best price for your product or service is one that is low
enough to attract customers but high enough to make you a
good profit.
Can entrepreneurs set prices that attract customers and
guarantees good profits? It is possible, but you’ll have to
know the strategies to apply and in what markets to apply
them.

-Value to customers;
One of the most effective strategies you can use is to price
your product based on value. The value of a product means
different things to different people. The more value a person
places on a product or service, the higher the price they’re
likely to pay for it. You may not be willing to pay N1,000 for
a bottle of water, because there is water everywhere around
you. But if you’re lost in the middle of the Sahara desert with
no water to drink for five days, if somebody shows up with a
bottle of water and offered to sell it at N2,000, you will most
likely go for it.
This clearly shows how consumers react to price when the
product holds a lot of value for them. This value could be
based on several factors such as emotions, survival, greed,
scarcity, status etc. The higher the value customers place in
your product or service, the higher the price they’re likely to
pay. It’s a natural law and a fact of human behaviour.

-Know your customer;
Analyse your market and study your potential customers
when you’re setting prices for your products or services. You
can set any prices you want, but if your target customers
cannot afford it, your business won’t sell anything. By
studying your target customers’ behaviour, likes, dislikes,
preferences, tastes, lifestyle, income levels etc, you will gain
a lot of insight that will help you to set the right prices for
your products or services.
There are three main types of customer groups you should
always consider when youfre setting prices. Price-sensitive
customers – price is the most important factor that affects
their buying decision. Convenience-centered consumers –
Those who value convenience more than everything else.
Quality-conscious customers – They will pay anything to get
the best quality of a product or service. The more you know
about your target customers, the better you can set a price
that will appeal to them. Putting your customer first is a
strategy that always works.

-Cover your costs;
To survive and succeed in business, you need to make
profit. Profit means that youfre selling your products or
services at a price that is higher than the amount it cost you
to make the product or deliver the service. Before you set a
price for your product, you need to be very sure that it
covers your costs and will make you a profit.
Apart from the cost of making a product, you also need to
know how many products you need to sell in order to turn a
profit. Many entrepreneurs just set a price that looks good
without first checking if the price covers their costs and will
be profitable. If you set a price that favours your customers,
but is bad for your business, it will only be a matter of time
before you won’t have a business anymore. You must
consider your direct and indirect costs. If your cost is more
than your price, it’ll only be a matter of time before you run
out of business.

-Competition;
Everybody who does business knows that price is one of the
effective ways of attracting customers to your product or
service. This is why you need to always consider the pricing
of your competitors. Consumers are smart; they always want
a fair price, and will always compare your price against your
competition. If a competitor’s product is cheaper and there’s
no major difference in the value of the products, you could
lose customers to your competition.
Business is a race. You need to constantly make sure that
your product or service is competitively priced, especially if
your products and services are similar to those offered by
the competition.

-Demand;
More than 99 percent of consumers only buy products and
services they need or desire. But there are times when
people are ’forced’ to need and desire certain products and
services. In such periods, the demand for these products
and services skyrocket beyond the supply in the market.
When such events occur, it’s usually an opportunity to raise
prices.
For example, during festive seasons like Christmas, New
Year and other religious and national celebrations, the
demand for food products automatically increases. Because
more people than usual will want to buy foods like rice,
chicken, drinks etc. to celebrate with their families. Also,
before the Ebola outbreak in West Africa, not many people
knew about or had used a ‘hand sanitizer’ before.
The demand and price of this gel, which is usually applied
on the hands to kill germs, skyrocketed. The huge
unprecedented demand for this product made it a highly-
priced product overnight. To get the best price for product
or service, it’s always a good strategy to target periods of
high market demand.
By targeting times of scarcity or excess demand, you could
increase your pricing as a strategy to make more profits.
These opportunities are not available throughout the year so
it makes perfect sense to exploit it the most you can.
Culled from Smallstarter.com.

Funke Shonekan- 7 valuable points to note for successful networking as a start up

Attending a networking event may fill you with dread,especially if you’re not a naturally confident person, but in order to push your business or even your own career, it is essential that you harness the
skills to communicate and navigate the world of networking
to become a success. Networking events provide us with the
opportunity to meet like-minded people and market our
business more naturally than by advertising.
Here are a few points to note for successful networking as a
start-up:



Do your Research
Before you book yourself onto any networking event, ensure
that you’re doing it for the right reasons. It’s easy to just go
in and not really know what to do or how to act, without a
pre-thought as to what you actually want to get out of it.
Networking is not for everyone, so access what it is that you
want to achieve by going to the event.
When you’re aware of what you would like to gain from
networking, you will not appear vague during conversations,
and you’ll be able to steer the conversation more naturally.
Whether you’re seeking a mentor to guide your business to
success, or finding out specific information from a company
to help grow your company. Try to break away from opening
questions that will fall flat are after a few minutes and if you
have a list of attendees prior to the event, see if you can do
some research into their general interests and hobbies so
that you’re more likely to have a deeper conversation.


Be Prepared
Business cards are an essential element to help you gain
interest in your business, and enable people to follow you
up easily rather than having to search the internet for your name or company.
Make your business cards easily accessible, and ensure
they’re up to date with your full list of contact details. Not
everyone wants to pick up the phone, so include your email,
social sites and any other relevant information about your
business. This way when it comes to connecting with you,
they can do this in the most natural way for them, rather
than being forced out of their comfort zone on first contact.
If you’re not offered a business card whilst talking, just ask.
It sounds simple but don’t be afraid of showing a keen
interest in them or their business. Everyone is using
business cards now, and it makes it far easier for a
relationship to continue after the event, than the risk of
losing an interested person.


Open Up to Opportunities
Even if you’re quite happy with the way your business is
growing or the way your career is developing, you simply
never know the connections you may find at a networking
event.
Just because you’re happy where you are right now, doesn’t
mean that you won’t need any help at a later date. Plus you
may find new contacts for other purposes that are going to
benefit you.
From finding future collaborators to finding funding for your
projects, be open to the endless opportunities that
networking may offer you.


Dress to Impress
When you’ve taken the time to put yourself out there at an
event, make every effort to represent yourself or your
business in the best possible light.
We never like to judge a book by its cover, but if you want a
professional to back your business you need to show them
that you’re serious and that you take the utmost care when it
comes to every element of your business, including how you
dress. Mind your manners and dress smartly as if it was a
job interview. Keep eye contact and try your best to make a
good impression, as you and your business are on show.


Make Connections
Rather than asking probing questions that may intimidate
people, try to be personable and approachable.
Although you’re all there to talk business, it doesn’t hurt to
take a keen interest in other areas of their life. After all we
all buy into ideas or products that we feel a connection with,
and we always remember the people we like. So increase
your likability and spend time taking a personal approach.
Don’t put yourself or your business plan at the beginning of
every conversation and take the time to listen to others.
Circulate
It’s very easy to get caught up in wanting to target the people
you feel can help you, but don’t just make it all about them.
Navigate your way around the event and take the time to
talk to everyone and get an understanding for what others
are here for.
Remember that there are many people to talk to from all
walks of life that you may learn something from each of
them. Don’t monopolise peoples time and be accepting that
there are lots of people wanting learn just as much as you
do.


Follow it up
Once you’ve finished a networking event and found people
that you truly connect with, on a personal or a professional
level, it’s common practice to add them on LinkedIn.
Don’t be dismissive of those that perhaps cannot offer you
anything immediately, as if they ever change their position,
they could be instrumental in helping you with your own
success.
Whether it’s a call or an email, follow-up and continue the
conversation.
Networking is not just about how many business cards you
manage to hand out, it’s about the lasting impression and
the way you make people feel.

Ife Tokan: Do We Really Need Mentors To Succeed?

Right from birth we have always had someone who would direct us. Whether in the form of a parent, teacher, sports coach or manager at work. It is inevitable as human beings that we must be led or directed; even our leaders have leaders.

A mentor is someone who is where you want to be or someone who you are sure knows how to get you there. A mentor is not a babysitter who tells you what to do. Your mentor is like sat nav in a car; he/she will only give directions, but you must decide to drive towards the destination. I hear you ask, why do you need a mentor?

In most cases a mentor will have more experience in life and in your industry than you do (if your mentor isn’t more experienced than you then he/she shouldn’t be your mentor). This is very important to further your career. A mentor would have made mistakes that he/she can advise you to avoid. Having a mentor will not only increase your chances of becoming successful but may also make the process quicker.

Mentors also have a more objective view. Sometimes we have members of our family or a very distant relative as a mentor. While there is nothing wrong with that, this may cloud their objectivity. Having a mentor that is outside your family will bring fresh perspective and positive criticisms to your ambitious goals which will be very healthy for your success.

Their network will become your network. This is probably the most important reason of having a mentor. I previously mentioned that your mentor is someone who has more expertise in your industry than you do, more experience equals a robust network because the fact is “everyone needs someone to become a someone.”  Your mentors networks becomes yours. Every time they introduce you to someone you indirectly represent them (therefore do not abuse). Again using their network will speed up your journey to success.

Your mentor becomes your confidante. Depending on the personality of your mentor or the kind of relationship you have with your mentor, they could also be the person you run to discuss some personal issues. Let’s be real, every now and again we all need someone to talk to. It is always healthy to let stuff off your chest.
Sometimes we may attach ourselves to the wrong personality as our mentor or someone who doesn’t believe we can achieve our ambitious goals. Sometimes, it is someone who isn’t supportive or maybe we may have out grown our mentor. Don’t be afraid to get rid of your mentor professionally. At the end of the day it is your life. If someone isn’t adding value they are subtracting value.

Try to add value to your mentors by taking an interest in what they do for a living or maybe their personal hobby. It is not necessary to do so, but a mentee who equally adds value to their mentor will only strengthen and make the relationship more enjoyable.

Don’t be afraid to have more than one mentor. If you are the type that believes in multiple streams of income or you like to diversify your portfolio then you need an expert (mentor) for each stream of income.

To conclude, a mentor is essential to get you to the next level and enhance your prospects to succeed, not just in your career but in your life. It is never too late to get a mentor because the road to success has no destination but a constant journey of development and self-assessment till you die. So get one today!

N.B. A great example of a fantastic mentor relationship is that of Liz Lemon and Jack Donaghy in the NBC comedy show, 30 ROCK.