One of the most important issues facing companies both in the Internet space and otherwise, is how to price their products.

We've found that one of the best ways to help companies with the pricing problem is to first identify several questions they should consider. While this is not meant to provide an exact price for any product, it does significantly help ensure that many relevant issues are raised.

With this is mind, here are five questions you need to think about when pricing your product. At the end, we'll link you to related articles on our web site that also deal with pricing.

ALTERNATIVE SOLUTIONS

What alternatives do buyers have for solving their problem? Are they aware of these alternatives?

Customers who are knowledgeable about competing products will generally use the prices of these products as a comparison point. Of course, you have to remember that even if clear alternatives don't exist, customers may use any nearby idea as a benchmark. For example, they may put all downloadable software into the category "shareware" and expect a very low price from any downloadable software.

EASE OF COMPARISON

How difficult is it for buyers to compare the products of other suppliers? Can the benefits be easily observed, or must they be experienced first?

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ABOUT THE AUTHOR
image of Allen Weiss

Allen Weiss is the founder of MarketingProfs as well as the founding teacher and director of Mindful USC, and a senior teacher at InsightLA.org where he has taught mindfulness classes for the past 12 years. He started meditating in the mindfulness tradition in 2005 and in 2011 his Basics of Mindfulness class at InsightLA was noted the Best in Los Angeles by LA Magazine.