The Power of Price: How the Right Strategy Can Make or Break Your Business

Photo Credit: Megan Aguilera

When it comes to building or running a business, pricing is one of the most powerful and risky decisions you’ll ever make. Set your price too low, and not only will it be difficult to generate real profit, but you also risk positioning your brand as “cheap. On the other hand, setting your price too high can either drive away potential customers or place you in the luxury market. Neither outcome is wrong, but it’s essential that your products and services truly reflect the value your pricing communicates. The truth is, pricing isn’t just about numbers; it’s about strategy, psychology, and positioning.

At Elevate with MGM, I work with entrepreneurs and small business owners who often underestimate just how much pricing impacts their brand’s success. Let’s break down why pricing matters and explore some strategies you can use to ensure your business not only survives but thrives.

Pricing impacts more than just what ends up in your bank account:

• Profitability – This one’s obvious, but still the most important. If you’re not pricing correctly, you’re leaving money on the table or, worse, running at a loss.

• Perceived Value – Like it or not, people often associate a higher price with higher quality. A $10 bag feels different than a $100 bag, even if they’re made of the same material.

• Competitiveness – In a crowded market, a difference of just a few dollars can be the reason someone chooses your competitor over you.

• Customer Loyalty – Discounts, bundles, or rewards make people feel like they’re getting more for their money, while premium pricing can build a sense of exclusivity and pride in owning your product.

  
  

These are the reasons why before you set a price just because it looks like it will give you the biggest profit, you should pause and ask yourself: what do I want my price to say about my business? If your goal is to be seen as affordable, budget-friendly, and accessible to anyone, then your price needs to reflect that. On the other hand, if you want your brand to be perceived as exclusive, luxury, or high-quality, then your price has to match that image too.

At the end of the day, pricing isn’t just math, it’s marketing, branding, and customer psychology all working together.

Common Pricing Strategies Every Business Should Know

There’s no one-size-fits-all when it comes to pricing. The right strategy depends on your goals, your market, and how you want your brand to be perceived. Here are some of the most widely used pricing strategies and when they might make sense for you:

• Competition-Based Pricing – Setting prices based on what competitors charge. Useful in saturated markets where small differences can influence customer choices.

• Cost-Plus Pricing – Adding a set markup to your costs. Simple to apply, but it doesn’t always reflect perceived value.

• Dynamic Pricing – Prices shift based on demand, competition, or timing (common with airlines, hotels, and Amazon).

• Freemium Pricing – Offering a free basic version of your product or service, with paid upgrades for more features (common in software).

• High-Low Pricing – Launching at a higher price, then offering discounts or seasonal sales. Typical in retail and fashion.

• Hourly Pricing – Charging per hour of work. Common for freelancers, consultants, and contractors.

• Skimming Pricing – Starting at a high price to maximize profit on early adopters, then lowering over time (common in tech products).

• Premium (Prestige) Pricing – Charging higher prices to reinforce a luxury or high-quality image.

• Project-Based Pricing – Charging a flat fee for an entire project, rather than hourly work. Often used by creatives, consultants, or service providers.

• Bundle Pricing – Packaging products or services together at a single combined price. A great way to increase perceived value.

• Psychological Pricing – Using price perception tactics like $99.99 instead of $100, BOGO deals, or placing a premium item next to the one you really want to sell.

• Geographic Pricing – Adjusting prices based on location, economy, or market demand in specific regions.

Photo Credits: Megan Aguilera

Pricing is one of those business levers that can either launch you into growth or quietly sabotage your success. The key is to be intentional. Test, evaluate, and remember that the right pricing strategy is about more than covering costs it’s about telling your story, positioning your brand, and creating a path to profitability.

At Elevate with MGM, I believe no business should grow alone. Pricing can feel intimidating, but all you need is the right strategy for your business.