The Top 10 Pricing Mistakes Companies Are Making
Jared Sperli stashed this in startup
I think #1 is most important.
Mistake No. 1: Basing prices on costs, not customers’ perceptions of value.
Prices based on costs invariably lead to one of the following two scenarios: 1) if the price is higher than the customers’ perceived value the cost of sales goes up, discounting increases, sales cycles are prolonged and profits suffer; 2) if the price is lower than the customers’ perceived value, sales are brisk, but companies are leaving money on the table, and therefore are not maximizing their profit.