Growing your margins and pricing while recruiting new customers is a typical business dilemma. But, difficult as this may seem it is not impossible – indeed it is quite achievable.
How? One of the ways is to focus on price segmentation. In simple terms this is about differentiating your product or service to different sectors or groups of customers based on their willingness to pay.
In order to develop a price segmentation approach you need to fully understand your customers in a number of ways;
- What drives their need for your offering.
- Situation and circumstances they operate in, in relation to your offering.
- What they value and what your offering can add to their business or drive value for them.
From this you can begin to understand their willingness to pay and therefore begin to develop your segmentation approach to these different segments of your market.