Chocs Away!

Pricing is the most nebulous of the marketing Ps to me. The key is obviously to fill (in as unique a way as possible) a need that people are prepared to pay for without thinking much about the cost. In economics-speak, this is known as being a non-commodity product.

But the value to the user is ultimately dependent on their worldview and utterly subjective. So, in some sense, you should charge what you can. Too many businesses undervalue their expertise and thus limit their revenue when the willingness of people to pay for something is greater than they imagine (as I was forcefully reminded the other day when witnessing the eagerness of people to pay for the services of a psychic).

However, there is an upper limit to your mark-up - that point at which you move from valuing your expertise to implictly mocking your users. It's a highly profitable tactic, but one that has a limited shelf-life as the wonderful Noka expose recently revealed.

Branding may change your users view of you, but it won't help you if you're undercut by a disruptive competitor who would seem to offer something that's almost as good, but much better value for money.