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Sunday, August 08, 2010



Many executives seem to think treating all customers the same way is somehow fair. For years UPS prided itself on the fact that "your grandmother paid the same price GM did." When it entered the market, FedEx became the fastest company to reach $1 billion in sales in part because its pricing recognized inherent value differences between customers (residential versus commercial), orders (parcels versus documents), time of delivery (8 a.m. versus afternoon), and other variables.

If you are uncertain how to establish a general fee for your service, you should be. You can determine a "reasonable and customary rate" based on the marketplace and your competition, but, especially if you are providing a service, you need to be flexible, and to use that flexibility as a marketing tool.

Pricing Question # 3: What is the Reasonable and Customary rate for your product or service?

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