If clients don't understand your pricing, they may suspect that they are being overcharged.
Understanding is based on choosing units for pricing that are recognizable. In the computer business, for example, it's understandable be charged for hours of connect time, but baffling to be charged for CPU cycles.
Pricing units must also be controllable by the client. For example, you would resent being charged by the hour for time in a commercial airline, since delays are beyond your control. Instead, you are given a fixed price for a trip.
Pricing units must also be measurable. For example, when dining at a restaurant, you would not want to be charged by the calorie since you could never really know if you were being billed fairly.
If the units are not easy for your clients to understand, a revision of your pricing matrix is in order.
Root cause:Internal economy, pricing copyright 2024 N. Dean Meyer and Associates Inc. All rights reserved.
