What are the steps to developing a competitive pricing strategy?

Pricing strategies may vary for different products & and services, but a basic rule for any industry Cost Per Unit/Break Even Point = (Fixed Cost/Unit Product) + Variable cost/Unit Let's take the example of the SaaS industry we add employee salaries, content creation, everyday tools, etc as a fixed cost The variable cost includes server usage depending on the number of customers and their usage, licensing fees for third-party services, and user acquisition costs. Don't forget to add your profit margin to get final pricing

In whatever business you are in, many others are selling/delivering the same product/services you are providing. Without identifying your UVP, things will be very difficult for your business. Once you've defined it, this UVP message must be very clearly apparent to your client, and delivered with no other than perfection!

After finding your break-even point, find the Unique value proposition for your product or service, every industry has competitors, so define which feature will be your UVP that will force your customer to select your product rather than competitor Customer will pay a higher price if your solution helps them to solve their problem. Take advantage of UVP to increase your profit margin

When defining the price of your services, it is important not only the expenses involved and the effective time spent, but above all to know how to convey what makes your service more valuable than those on the market. Excellent treatment of people, professionalism and punctuality must be the pillars.

Pricing strategy depends on many factors, personally I believe most importantly is the company's strategy and capital you have. Calculating all of your fixed & variable costs is no magic. Yet, strategizing your flexible pricing based on your board's strategy and injected capital is they key for a successful pricing strategy, whereby you must have a clear vision of your niche and target that you can achieve by positioning yourself and prices at a certain level & target. Having said that, other factors known to everyone is equally important from market price to all other factors. Another important factor is that after you've done the above, you have a challenge of managing your fixed cost dynamically to allow for strategic expansion.

Testing and optimizing your prices is a never ending cycle. Prices are very sensitive and gets easily affected by many fluctuating factors. I would very much advise to run this exercise regularly. Yet, it is extremely important for you to stay up to date with the market, competitors, and other related regulatory & economical factors that directly or indirectly affect your pricing strategy.

Pricing is a fluctuating part of your business, you can't decide on pricing your product or service in one go. it is an iterative process like product development, there are many factors like a competitor, infrastructure costing, and user acquisition costing, that may increase or decrease your product price. Visit your pricing strategy dashboard regularly, and spend time on it.