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How to Decide on the Right Pricing Strategy

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It’s no secret that pricing is one of the most important aspects of any business. After all, it is what determines how much revenue a company can generate.

However, pricing is also one of the most difficult decisions for businesses to make. There are so many different factors to consider, and oftentimes, businesses are unsure of what the right pricing strategy is for them.

This is where we come in. In this article, we will provide you with 10 tips to help you decide on the right pricing strategy for your business. We’ll cover everything from understanding your costs to considering your customer’s willingness to pay. By the end of this article, you should have a much better understanding of how to price your products and services.

Be flexible

Finally, it’s important to be flexible with your prices. Prices may need to be adjusted based on market conditions, seasonality, and other factors. Don’t be afraid to change your prices if necessary, but know how to make upward adjustments that don’t lose you business.

A good strategy when it comes to price flexibility is to have a pricing strategy that is dynamic. This means that your prices will automatically change based on certain conditions. For example, you may raise your prices when demand is high and lower your prices when demand is low.

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Make sure you understand your costs

When it comes to setting prices for your products or services, one of the most important things to consider is your cost of goods sold (COGS). This includes the cost of materials, labor, and any other expenses that are directly related to producing your product or delivering your service. If you don’t have a clear understanding of your COGS, it will be difficult to set prices that allow you to make a profit. This is where good data analysis comes into play.

Consider the value of your product or service

In addition to your costs, you also need to think about the value of your product or service. What are customers willing to pay for your product or service? This is often referred to as the “perceived value.” If customers perceive your product or service to be valuable, they will be willing to pay more for it.

Understand your competition

It’s also important to understand your competition when setting prices. What are they charging for similar products or services? If you price too high, you may lose business to your competitors. If you price too low, you may not be able to make a profit. Additionally, if you price yourself too low, you may unintentionally communicate lesser value to prospective customers.

Use pricing strategies wisely

There are a variety of pricing strategies you can use to set prices for your products or services. Some common pricing strategies include cost-plus pricing, competitive pricing, value-based pricing, and dynamic pricing. It’s important to choose the right pricing strategy for your business and products or services.

Consider discounts and promotions

Another thing to think about when setting prices is whether you’ll offer discounts or promotions. Discounts can be a great way to attract customers and boost sales. However, you need to be careful not to discount your prices too much or you may not be able to make a profit.

Think long-term

When setting prices, it’s also important to think about the long-term. What are your goals for your business? Are you trying to build a sustainable business or are you looking for a quick return on investment? Prices that are too low may not be sustainable in the long term, which is why it’s important to have a product road map that lays out your current and future pricing strategy.

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Think about your target market

When setting prices, it’s also important to think about your target market. Who are you trying to reach with your pricing? What are their needs and wants? What are they willing to pay for your product or service? Consider these factors when determining your prices.

Consider your brand

Your prices should also be aligned with your brand. If you’re selling luxury goods, your prices should reflect that. If you’re selling budget-friendly goods, your prices should reflect that as well. Your prices should match the image you want to portray for your business.

Test your prices

Once you’ve decided on your pricing strategy, it’s important to test it out. See how customers react to your prices. If they’re not happy with your prices, you may need to adjust them.

A good way to run pricing tests is to use a/b testing. This is where you offer two different prices for the same product or service and see which one performs better. You can also use a/b testing to test different pricing strategies.

Conclusion

Understanding what goes into determining your pricing model and how to make adjustments as needed is a fundamental part of running a successful business. Use these tips to help you make the right pricing decisions for your business and products or services.

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MARKETING

Trends in Content Localization – Moz

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Trends in Content Localization - Moz

Multinational fast food chains are one of the best-known examples of recognizing that product menus may sometimes have to change significantly to serve distinct audiences. The above video is just a short run-through of the same business selling smokehouse burgers, kofta, paneer, and rice bowls in an effort to appeal to people in a variety of places. I can’t personally judge the validity of these representations, but what I can see is that, in such cases, you don’t merely localize your content but the products on which your content is founded.

Sometimes, even the branding of businesses is different around the world; what we call Burger King in America is Hungry Jack’s in Australia, Lays potato chips here are Sabritas in Mexico, and DiGiorno frozen pizza is familiar in the US, but Canada knows it as Delissio.

Tales of product tailoring failures often become famous, likely because some of them may seem humorous from a distance, but cultural sensitivity should always be taken seriously. If a brand you are marketing is on its way to becoming a large global seller, the best insurance against reputation damage and revenue loss as a result of cultural insensitivity is to employ regional and cultural experts whose first-hand and lived experiences can steward the organization in acting with awareness and respect.

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How AI Is Redefining Startup GTM Strategy

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How AI Is Redefining Startup GTM Strategy

AI and startups? It just makes sense.

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More promotions and more layoffs

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More promotions and more layoffs

For martech professionals salaries are good and promotions are coming faster, unfortunately, layoffs are coming faster, too. That’s according to the just-released 2024 Martech Salary and Career Survey. Another very unfortunate finding: The median salary of women below the C-suite level is 35% less than what men earn.

The last year saw many different economic trends, some at odds with each other. Although unemployment remained very low overall and the economy grew, some businesses — especially those in technology and media — cut both jobs and spending. Reasons cited for the cuts include during the early years of the pandemic, higher interest rates and corporate greed.

Dig deeper: How to overcome marketing budget cuts and hiring freezes

Be that as it may, for the employed it remains a good time to be a martech professional. Salaries remain lucrative compared to many other professions, with an overall median salary of $128,643. 

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Here are the median salaries by role:

  • Senior management $199,653
  • Director $157,776
  • Manager $99,510
  • Staff $89,126

Senior managers make more than twice what staff make. Directors and up had a $163,395 median salary compared to manager/staff roles, where the median was $94,818.

One-third of those surveyed said they were promoted in the last 12 months, a finding that was nearly equal among director+ (32%) and managers and staff (30%). 

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Extend the time frame to two years, and nearly three-quarters of director+ respondents say they received a promotion, while the same can be said for two-thirds of manager and staff respondents.

Dig deeper: Skills-based hiring for modern marketing teams

Employee turnover 

In 2023, we asked survey respondents if they noticed an increase in employee churn and whether they would classify that churn as a “moderate” or “significant” increase. For 2024, given the attention on cost reductions and layoffs, we asked if the churn they witnessed was “voluntary” (e.g., people leaving for another role) or “involuntary” (e.g., a layoff or dismissal). More than half of the marketing technology professionals said churn increased in the last year. Nearly one-third classified most of the churn as “involuntary.”

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Men and Women

Screenshot 2024 03 21 124540Screenshot 2024 03 21 124540

This year, instead of using average salary figures, we used the median figures to lessen the impact of outliers in the salary data. As a result, the gap between salaries for men and women is even more glaring than it was previously.

In last year’s report, men earned an average of 24% more than women. This year the median salary of men is 35% more than the median salary of women. That is until you get to the upper echelons. Women at director and up earned 5% more than men.

Methodology

The 2024 MarTech Salary and Career Survey is a joint project of MarTech.org and chiefmartec.com. We surveyed 305 marketers between December 2023 and February 2024; 297 of those provided salary information. Nearly 63% (191) of respondents live in North America; 16% (50) live in Western Europe. The conclusions in this report are limited to responses from those individuals only. Other regions were excluded due to the limited number of respondents. 

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Download your copy of the 2024 MarTech Salary and Career Survey here. No registration is required.

Get MarTech! Daily. Free. In your inbox.

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