Benchmark: Make the Price Right
According to pricing expert Tim Baye, an associate professor at the University of Wisconsin-Extension in Lancaster, small-company executives are getting more sophisticated at pricing their products and services. One factor: souped-up computerized accounting systems. Still, small-company executives report that they use a wide range of methods to set prices.
|Which approach did you use to price your most recent new product or service?|
|Cover cost and make a fair profit||41%|
|Charge what the market will bear||30%|
|Price relative to related products/match what competitors charge||21%|
|Use best guesstimate||5%|