Why You Should Keep Your Prices Low - Article by David J P Smith

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Why You Should Keep Your Prices Low	Popularity: Views: 1698

2010-04-11 06:42:38
	Article by David J P Smith

In the world today it very often makes sense to charge as much for something as you possibly can. As a business owner if you can charge more for something than you already are and have the same amount of business you'd be crazy not to, right? This logic certainly seems sound, but in reality there are a few reasons why you should charge the lowest amount that you can (as long as you're still making a profit).

The idea is that you charge as little so you can't be undercut by your competition and you can still grow as a business. Secondly, by getting people to invest in your company you can create brand loyalty and dependence. At this time you can put your prices up. If they've invested in you enough it will be cheaper for them to stay with you than to move to a competitor. Think of how telephone and cable companies wire your house with their own cables. This is their way of getting you to invest in them. If you then decide to change companies it costs you a lot more to get everything re-wired than it does for you to pay a slightly higher monthly fee and to stay with them.

An even better way of doing things is to offer a free option to start out with and then offer them a subscription service if they want to upgrade. For example, with Skype you can make telephone (or video) calls to other computers with Skype installed free of charge. This gets people to invest in Skype and I even know people who have cancelled their regular phone landline because they like the free service of Skype better. Then, if someone wants to make a call to a regular landline or a mobile phone they must have 'Skype credit' which they need to pay for. Before you know it you've canceled your BT contract and moved over to Skype!

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