A good friend of mine had an MBA and a high-profile job at a major US airline. I frequently went to her for advice as I was starting my business. I remember talking with her about pricing one day and what she said has stuck with me all these years.
I was nervous about charging too much for my main product. The heart of the business was selling baskets of produce for half the grocery store price. The tag line was “eat healthy…affordably.” This type of product and messaging appeals to people who are very price-sensitive. I floated the idea of starting out at one price so I didn’t lose my current customers and then raise the price to what it needed to be later and maybe grandfathering in the existing customers.
She said, “Kristina, begin as you mean to go on.” She continued, “If the price needs to be X, then that’s what you should charge and you should start out with that price. Don’t plan to change it later. That causes a hassle for your customers & you. Own it. You’re providing a valuable service that people want. If you charge the right price, you’ll be able to continue providing it, so don’t be worried about charging what is fair and necessary.” Those may not be her exact words. It was a long time ago. But that’s what I got out of our conversation.
I took her advice and set my starting price at what it needed to be. New customers kept coming, I didn’t lose my existing ones, and the business had enough revenue to thrive.
That piece of advice has applied to more than pricing strategy. I’ve applied it in many situations when it has been tempting to trade the status quo of the moment for a sustainable future.