Welcome to the high-stakes game of pricing strategy, where the “rules” can feel as unpredictable as the weather and the stakes are your profits. 

You worry that if you set your prices too high, you’ll spook potential customers. Go too low, and your bottom line takes a hit.

But who said pricing has to be a wild stab in the dark? 

There’s a better way to nail your pricing – and it’s all about tuning into your most valuable asset and resource:

Your clients and customers.

When you get up close and personal with your ideal clients – understanding their woes, their wants, and even their wallets – you start to see your brand’s value through their eyes. 

And that’s where the magic begins and the guesswork ends.

In today’s blog, I’m unpacking how customer feedback is one of the best solutions to demystifying your pricing strategy. Grasping the different budget ranges and experiences of your clients is a critical step in designing pricing strategies that resonate with your customers, leading to nods of approval and an upward trend in your revenue.

Let me show you how…

Unlock the Power of Market Research

First and foremost, market research is a cornerstone in setting strategic prices (that actually add up). 

This process means you need to have genuine conversations with your potential, current, and former clients or your ideal customer avatar (ICA).

Market research goes beyond asking questions and passively logging responses in a spreadsheet. It’s about listening – really listening – to how they perceive your pricing, understanding the limits of their budgets, and getting to the heart of how they value what you bring to the table. 

It’s a deep, no-holds-barred, dive into the minds of those who matter most to your creative business.

Now, let’s walk through how to do market research for your creative business, specifically with your pricing strategy in mind:

Connect with Customers

To kick things off, open up a dialogue with your potential, current and past customers. Your goal here is to gather insights so that you have solid data to guide your pricing decisions.

In this first phase of figuring out your prices, you’re just collecting information. You don’t have to decide anything right now. Just ask questions, learn more, and talk to your ideal customers. You’ll start to see clear answers soon.

Customer Perceived Value

Ask them about the worth of your offer to them. Questions like “What would (or did) make buying this feel like a good choice or investment for you?” and “How would (or did)  you decide if this is worth it?” can be illuminating and maybe even offer surprising responses!

Price Range and Affordability

Next, instead of just asking “Would you pay [insert specific price]?” for your product or service, ask them to choose from a range of prices, from ‘steal’ to ‘top dollar’.

This isn’t the time to pick a price just yet. Instead, it’s a litmus test of how customers perceive your offer’s value. Do they see it as essential or a premium investment?  You can often capture this information in a simple survey to your social media audience or email list! 

It’s really important to understand how much your clients can spend and what they think about your prices. From there, you can assess if your offer is something they see as a luxury, a must-have, a great deal, or somewhere in the middle.

Ask them about how much they can afford, but don’t stop there! Dig deeper to assess if your product is something they’d buy just once, or if they’re interested in options like paying in installments or a subscription model. 

Understanding where your product sits in their financial landscape is key to nailing price and payment options that will resonate with your customers.

Messaging

Next, you’ll want to get clear on what kind of marketing messages strike a chord with the clients and customers you want to reach.  

It might surprise you, but clarifying your offer messaging doesn’t just help with your marketing approach — it also influences how you set your prices. 

For example, if your audience responds best to words that suggest exclusivity or luxury, they might be more willing to pay for higher-priced offers. 

But, if they are drawn to terms like deals, bargains, and discounts, lower-ticket offers could be more attractive and sensible for them!

Here are a few ways you can tap into the pulse of your ideal audience’s messaging preferences:

1. A/B Testing

Quickly uncover what clicks with your audience by comparing two versions of your marketing content. It’s a data-driven way to refine your message and sharpen your pricing strategy.

2. Surveys and Polls

Go straight to the source. Ask your audience what resonates. Their answers can reveal unexpected insights to shape your messaging and pricing.

3. Observe Competitor Responses

Watch your competitors and learn. See what messaging and pricing strategies engage their similar audience – then adapt and improve for your business with your unique spin.

4. Analyze Past Marketing Campaigns

Look into your own history. Which marketing efforts spiked sales or inquiries? Unpack these successes to replicate and evolve your strategies.

COO Tip: When talking to past or current clients, make sure they still align with your current ICA so that the information you gather is relevant!

Understand and Cater to Your ICA

Getting into the minds of your audience is key to unlocking your Ideal Customer Avatar (ICA). 

When you truly grasp your audience’s needs, budget boundaries, and preferences, targeting your ICA becomes less guesswork and more concrete. 

Forget the old days of shooting in the dark with assumptions. Now, you can strategically zero in on that one perfect-for-you customer profile.

Armed with this knowledge, you’re not just able to set a price. You can confidently craft a value proposition that speaks directly to your target audience, compelling them not just to look but to leap.

Align Customer Experience with Pricing

With this initial market research in mind, turn your focus to how your clients have actually interacted with your current or past offers. 

Analyze whether the client experience aligns with your price points. 

Ask past clients about what aspects of the experience they valued most and consider if there are elements they could do without. 

Gathering testimonials and measurable ROI (Return on Investment) data can be powerful tools to demonstrate the value of your product or service.

If you learn that what people expect doesn’t match your offer, think about changing what you’re providing. 

For example:

• If you hear that your offer gives a lot more than expected, you might be able to raise your prices, knowing it’s worth it. 
• But, if people think it falls short, you could think about making it better by adding more support, better quality, or extra features.

Think of the different levers you can adjust to align your offer pricing with the value you provide so you can confidently stand behind your service or product.

Market Positioning 

Finally, take all of this information and use it to consider what your pricing says about you in the market. 

Intentionally position yourself and your offer in a way that aligns with your market standing, whether that be as a budget-friendly option, a value-for-money choice, or a premium, exclusive offer.

By following these steps, you can make informed, strategic decisions in your pricing strategy, ensuring it resonates well with your target audience and accurately reflects the value of your offerings.

Navigate the Sales Process

Market research sketches a picture; the sales process colors it in.

The sales process takes the theories from your market research and puts them to the test. 

As I like to say, “The proof is in the pudding!”

The sales process is where you see if what you thought your customers would be willing to pay holds up when they’re deciding to buy for real. This is your chance to see if your market research predictions were spot on or if they need some tweaking.

As you go through selling, you get real, hands-on insights about what your customers really think and need, and how much they value your products or services. 

This part of the pricing process is crucial. It either confirms what your market research suggested or shows you new directions to consider. It’s all about adapting. What worked, in theory, might need some changes in practice, and that’s totally normal (funny fact: People are notoriously bad at predicting their actions in hypothetical situations. There’s often a gap between what they think they’ll do and what they actually do). 

The sales process is your reality check, helping you refine your prices to align better with what your customers actually want and the ever-changing market trends.

Remember, in the pricing game, agility is your best asset.

Evaluate and Adapt with Sales Feedback

Consider adding a simple questionnaire immediately after making or attempting a sale, while the customer’s experience is still fresh in their mind. This immediate feedback is crucial for deciding if your prices need an adjustment, especially in understanding your offer’s evolving value in the market.

Focus on learning why customers chose or didn’t choose your offer. Their immediate, post-purchase insights can be incredibly telling. This straightforward approach can guide you to make informed pricing decisions, ensuring your prices align with what your customers are truly seeking.

COO Tip: Leverage your CRM (Customer Relationship Manager) or sales platform (Teachable, ThriveCart, etc.) to automate sending out the questionnaire. This integrates seamlessly into your sales process, allowing you to gather valuable data without lifting a finger. It’s a smart move that saves time and ensures you consistently collect this feedback.

Quick Disclosure: The Teachable link I shared is an affiliate link, which means when you click the link and make a purchase, it won’t cost you more, but I may receive a commission for sharing this with you. I promise I only ever share what I use and love, so I’d be sharing these with you anyway!

Strategically Use Upsells and Downsells

Once you’ve nailed the pricing of your main offer, it opens up a world of opportunities to further engage your clients throughout their customer journey. Consider both upsells and downsells as tools to match where your clients are at any given moment. Ultimately, this allows you to create a value ladder: a range of services, products, and offers that nurture your audience through each phase of their experience.

Upsells

Upselling is when you gently nudge your customers toward a shinier, better version of what they’re already interested in – it’s a strategic move to enhance their experience and your sale.

Look for chances to offer more comprehensive, higher-tier services or products. These are perfect for clients who are ready to take the next step and are willing to invest more for added value. Upselling effectively taps into the needs of customers who seek more from your offerings.

Downsells

On the flip side, downsells come in handy when you see your customer hesitating and say, ‘How about this more accessible option?’ It’s a smart move to keep them engaged by offering a more budget-friendly alternative to what they initially considered.

Downsells are great for clients who might not be ready for the full extent of your main offer. Offering a more affordable or scaled-down version keeps these clients in your ecosystem. It’s about providing options that fit their budget and needs right now.

Upsells and downsells are powerful ways to keep your clients hooked, happy, and hungry for more. This thoughtful approach to pricing and offer structuring can enhance the overall customer experience, fostering long-term loyalty and growth.

Learning from Your Clients  – Your Best Teachers

The information you get from your customers is really valuable for setting solid prices you can feel good about! 

Doing detailed market research, making sure your prices match the customer experience, and using feedback from sales to make smart choices are all ways to improve your pricing strategy.

The most important thing for setting the right prices is to keep talking to your customers. You need to understand what they want, what they like, and how much they think your product is worth. By doing this regularly, you can create a pricing plan that shows how good your product is and also fits what your customers are looking for.

We’ve barely scratched the surface! 

Dive deeper into my pricing resources specifically designed for creative entrepreneurs like you:

If you are running a creative business, I’ve got some additional pricing resources for you to explore. These blogs will show you how to set your prices based on more than just customer feedback.

You’ll learn about making sure you’re earning enough money, covering your costs, and reaching your personal financial goals for success.

• Pricing for Profit: The Ultimate Guide
• Why Pricing in a Vacuum is Dangerous: Strategies to Overcome It
• Navigating The Evolution of Pricing With Confidence

Or, level up your skills by joining my mini-course, ‘Pricing for Creative Entrepreneurs.’ Designed to equip you with the knowledge and tools necessary to confidently set prices that truly reflect your value and fuel sustainable business growth.

And, as always, be sure to join my email list to get the latest blog updates every week – hot off the press and straight to your inbox!