Pricing strategy for small businesses

Read a good article on pricing for small businesses in the Businessweek website. It has special relevance for me since it is very tough to price consulting projects across customer segments. The usual type of pricing based on your costs or on what the competition is charging is the reason for many small businesses going bust. The best way to price something is through a conjoint study; but for small businesses that cannot afford it, the better option would be to ask customers and find out the value being added in terms of costs saved by the customer through using your product or service. Another option is to ask your customer what their alternative would be if your product or service were not available. In many cases you may find that they really do not have alternatives and this means you can charge a premium! Pricing also has to be always customer specific, meaning you need to charge differently for each customer segment. So bad pricing strategies or lack of any strategy leaves money on the table which can be avoided profitably (http://www.businessweek.com/magazine/content/06_52/b4015452.htm?chan=smallbiz_smallbiz+index+page_today%27s+top+stories).

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