I am quite partial to a Belgium beer called Hoegaarden. You may have had the pleasure of having it. You may have not. For those that haven’t, it’s about the best Belgium Wheat Beer you’ve ever had. Yes its expensive, but it’s worth it.

A carton will set you back anywhere from $60 – $80 and will be priced between $9 and $12 in a bar or restaurant. Now you can imagine my surprise when just recently I witnessed a $16.20 sign at a well known Belgium pub in the city. I muttered a few words in disgust, inappropriate for this website, to my fellow beer lovers who were equally amazed. Naturally, we refused and drank something else. Stellar I believe at a far more reasonable $10.

There is an important business lesson to be learnt here. It is related to your pricing strategy.

Whether you are just starting out in business, are introducing new products and services or are reviewing your pricing structure, always remember this simple rule;

SET YOUR PRICE TO WHAT YOUR CUSTOMERS WILL BE WILLING AND ABLE TO PAY.

That was one major fail for the well known pub who have completely out priced themselves from the average beer drinker. Who would pay almost 50% more than the average? I drink a lot of beer, and a lot of Hoegaarden and I have NEVER seen it anywhere near $15, net alone $16.20!!

So how does this relate to your business?

Play with your pricing a little. Keep putting your prices up until you get to a stage where your customer no longer feels comfortable in handing over the cash. Then bring them down a bit and check that your competitors aren’t undercutting you for the same level of service.

But be careful not to overinflate or you’ll lose good, well paying customers and earn yourself a bad reputation around town. Just like our friends at the pub.