The Pricing Balancing Act

The growth stage companies in which Polus Capital invests, must make tough decisions daily — from how to maintain a strong customer base to the right number of employees to hire, all while operating in the very competitive technology and healthcare industries. One major differentiator each company would love to have complete control of is pricing.

Unfortunately, there isn’t a single equation to determine the best price. However, pricing usually involves considering certain key factors, including understanding your target customer, tracking how much competitors are charging, and knowing the relationship between quality and price.

Ten successful entrepreneurs from the Young Entrepreneurs Council reveal to Inc Magazine, “10 Ways to Raise Your Prices Without Losing Customers”.

We expand on a few responses below:

Be honest

Customers take a significant risk hiring a startup to fulfill a meaningful job within their organization. Being honest with those loyal customers is important. After all, acquiring a new customer is much more expensive than retaining one.

Explain your costs

If your product or service delivers on the sales promise, explaining your costs should be a simple task.

Over-Deliver first

Customers always want to know they are getting a good deal — or good value for the money they are spending on your product or service. However, don’t love your customer too much, that it impacts your overall business. We explain more about this here.

Explain but don’t apologize

As your business develops, your product should be worth more.

Inform your customers

Give customers a chance to buy a higher-tier plan before prices go up.

Unfortunately, there are outside factors you can’t control that impact pricing. One thing is certain, setting pricing shouldn’t be taken lightly, nor set and forgotten about.

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The Pricing Balancing Act
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About the Author

Alan Ying
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About / Bio
Alan Ying is the Managing Director of Polus Capital, a B2B focused company offering business owners "Entrepreneur-friendly Capital" . Most recently he was a Venture Partner at Chrysalis Ventures, a leading healthcare VC firm based in Louisville, KY. He is a regular columnist writing about growth companies at Inc.com.
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