I Love a Good Sale
I recently was in the market for a motorcycle jacket. I looked around online, but the prices
of riding jackets were high enough to make me feel that I needed to try them on before I
made a purchase, so I visited a local riding-apparel shop to take a look around.
It seemed that they were having a big sale, and I felt fortunate that I was in this particular
shop at the right time.
Instead of a typical “50 percent off everything in the store” type of sale, they had select
racks marked with advertisements that explained the product on the rack, the “normal
price,” and then the sale price listed below. The prices were about 50 percent off, but the
way the marketing team had listed these “specials,” it made me feel more like I was getting
a good deal, versus the business just marking up their prices, then slashing them for this
special event. I was truly enamored with their pricing.
so much in fact I bought a jacket, pants, and riding boots. The psychological pricing struc-
ture worked on me on that particular day, and I felt that I truly paid a fair price and was in
the right place at the right time.
Services that are priced below your costs are referred to as loss leaders. Although this spe-
cific strategy may not make sense initially and you will make no money on these types of
discounted services, the hope is that your customers will purchase other services from you
at higher margins—now or in the future.
In the end, I would suggest that pricing be set to fair market value or slightly below, assum-
ing that you are covering your costs. This gives you the opportunity to provide discounts
that can be in the form of coupons, rebates, seasonal prices, or other promotional mark-
As you develop the best pricing model for your small business, understanding the ideal pri-
cing strategy will depend on more than costs. It also depends on good pricing practices. It
is difficult to say which components of pricing are most important, but keep in mind that
the right price is the price the consumer is willing to pay, while providing you a profit.
Type of Services
Choosing the services for your business to sell may very well be the most difficult decision
you will need to make before opening day. The choices may seem limitless and the task
will likely be overwhelming at first. Not only should there be a demand for your service,
but it must be profitable and something you enjoy working on. I know, you're in this to be a
computer repair technician, but how many different computers are out there and what niche