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First, charge more than your costs. A surprising number businesses do not cold-heartedly understand or allocate their costs. The more you do, the more pricing power you have.
Second, charge as much as you can. Right? If you base this on benchmarking your competitors, this anchors you to the market mean. If your product is different or better, or if your cost structure differs from that of your competitors, then competitive benchmarking anchors you to the wrong target.
Third, charge as much as you should. Just because you can get by - or even sustain - at a lower price doesn't mean you should. Remember: the comedian's toughest audience is actually the one that got in without paying admission.
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