4 Unexpected Pricing Mistakes That Can Hurt Your Cryotherapy Practice
One of the major mistakes that cryotherapy business owners make is overlooking the importance of pricing in their overall business strategy. How much you charge for your cryo services can determine how much you profit from your business. It can also give you a competitive advantage. There isn’t much “art” to pricing. Undercharging eats into your profits while overpricing drives customers away. So what is the right amount?
Unique Cryo Chamber Pricing: Are You Making These 4 Simple Pricing Mistakes?
Marginal Revenue = Marginal Cost
That’s the golden rule. And it means that a business should continue to sell so long as the marginal revenue it receives from the additional sale is no less than the marginal cost to render that server or pay for the cost of the good. So the ultimate pricing strategy can actually increase your overall profits without you having to overcharge your customers because it focuses on increasing your overall market share.
But watch out for your marginal costs since any increases beyond your marginal revenue could spell disaster to your short-term operations. Here are 4 major pricing mistakes you should avoid for your cryotherapy practice.
Basing Your Prices on Costs
Always think about your customer’s perceived value. If you charge higher than your customer’s perceived value your profits will suffer. On the other hand, if you charge lower, you won’t maximize your business’s profit potential. This does not mean you should ignore your operational costs. Factor in all the costs, including that of your profitable cryotherapy machine. Use the figure as the minimum amount chargeable.
Failing to Update Your Prices Regularly
If your current pricing model is working why should you review your prices? For starters, you need to factor in inflation in your costs. Review your prices at least once a year and adjust them to suit the current market conditions. Most people fail to update their prices because they worry they’ll lose customers. This is, however, a destructive line of thought as low prices could end up crippling your business. You’ll be surprised at how little a slight price increment will impact your sales.
Underpricing Your Services
Low pricing doesn’t always result in more customers. If you're charging lower than most of your competitors you may even lose clients. This is because customers are now skeptical about pricing models. If your prices are lower they may consider that as a reflection of the quality of your services. A study revealed that customers were willing to spend more on a beer sold in an upscale hotel than when it was sold at the grocer.¹ Affordability is highly important, but customers prefer value. Raise your prices so that they are in the same range as the competition but slightly lower.
Ignoring the Competition
More than 80% of customers compare prices online before making a purchase.² This means that if your prices are significantly higher, they’ll leave for the competition. Research your competitor’s pricing strategy and find out how they calculate their costs. Find loopholes in their models and use them to optimize your prices.
Get More Profits From Your Unique Cryo-Chamber by Avoiding These Pricing Mistakes
Your pricing strategy highly influences your business profitability and customer retention rates. Instead of basing your prices solely on your costs, use factors such as customer value perception. You should also update your prices regularly and refrain from undercharging for your cryotherapy services.
Links to sources used
7 Pricing Mistakes That Can Seriously Stifle Sales - https://blog.hubspot.com/blog/tabid/6307/bid/34118/7-pricing-mistakes-that-can-seriously-stifle-sales.aspx
50 Retail Stats To Consider For Your Brand’s Future - https://www.forbes.com/sites/blakemorgan/2020/06/18/50-retail-stats-to-consider-for-your-brands-future/?sh=533bd31d6421
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