Believing that you can only sell more by having the lowest price or offering the best discounts is one of the myths about pricing that can cause companies to fail.

Some practices used in setting prices which are still considered the most suitable by some, are actually are harmful to long-term management of the company.

By Ariel Baños, President and Founder of Fijaciondeprecios.com

Five myths about prices that destroy businesses

There is nothing so dangerous to a company than managing prices based on any of the 5 myths listed below. So, don’t say we didn’t warn you …  

1) Only those with the lowers prices make sales 

Have you ever had to take part in a meeting with a company’s sales department? Well if you haven’t then I will tell you about it. It is almost impossible not to hear in these meetings complaints about how difficult it is to sell because of lower priced competitors. However, although the price is used as an argument in any negotiation, are most customers really looking for low prices?  

For example, a survey conducted by the Center for Agribusiness at the Austral University of Rosario (Argentina) in 2010, showed that between 60% and 80% (depending on product type and size of producer) of respondents did not choose the lowest priced products when making purchases of agricultural inputs.

Only a fraction of customers believe that the only thing that matters is the price when they buy something.

Read full article (in spanish).

Source: fijaciondeprecios.com