Workplace Calisthenics: Setting proper price can be first step to success

Cal LeMon, of Executive Enrichment Inc., solves organizational problems with customized training and consulting.

Congratulations on your new business.

By this time you probably know the euphoric high of signing your first salary check to yourself. Also, by this time, you probably know the episodic depression of worrying that the numbers in your corporate checking account balance are larger than the amount of the check you just wrote yourself!

If you have or are thinking about building a business with your name and personality slapped all over it, you have a company name and logo, 500 ballpoint pens emblazoned with your company slogan, 500 business cards, a PR photo, a computer, a PO Box number, stationery and a new suit or dress.

The one thing you may have forgotten is price. After you come back from your "business pose" photo shoot and have picked up your business cards, you would be well-advised to think through what you will be charging your customers.

It works like this: new customers will never get to savor your extraordinary customer service, magnetic personality or value-added features if they cannot make it past your price tag.

There are four factors that will dictate what numbers you will tack on to the price of the privilege of working with you.

No. 1 is the "environment."

Recently I went to the circus at the Shrine Mosque with my grandson. The laser show on the ceiling, the loud roar of tigers pawing at their trainer's whip and the clown (with the obnoxious whistle!) was enough to put my 2 1/2- year-old "Papa's Little Man" into a trance.

He stared in amazement at the three rings of visual delight until he discovered the battery-operated fiber-optic light machine the little boy in front of us had in his chubby little hand.

It took about three nanoseconds before the adults in our row of seats decided that Papa should spring for some sensory delights for Nicholas. Ten dollars later, I presented this little guy with his new favorite toy for the next hour.

Ten dollars! If this whirling piece of plastic cost the vendor more than 15 cents, I will attend every night next year.

I was prepared to sacrifice $5 and could not believe my ears. Hey, what are you going to do? There was that cherub face looking down 12 rows above you are you really going to go back, sans light machine, because the price wasn't right?

If you have the right environment and you are among limited choices for your customers, you can attach the mother-of-all price tags.

No. 2 is competitive advantage.

Compared to your competitors, where do your prices fall? If you are too high, your customer base becomes suspicious that you want a windfall and then will sellout. If you are too low, customers believe you are a newcomer to the market and could be guilty of bait-n-switch.

If you have no reputation, price just below your competition and emphasize the additional services that come with your product. Do not hide you are the neophyte; rather, use your position as new kid on the block to leverage your growth.

No. 3 is "buzz." Does anyone remember when Cabbage Patch Dolls and Perry Como Sweaters were the rage? The "rage" is really the psychological "buzz" (it spreads faster than the common cold on a trans-Atlantic flight) that makes any price seem reasonable.

Please notice that "buzz" does not have to do with premium product; "buzz" is the contagion of being popular ("popular" is really the fear of rejection).

Finally, your commitment is tied to your price. I believe I can "sell" anything, at a price that seems reasonable to me, if I "own" it in my gut.

In other words, your best price point is that comfortable place in your mind and spirit where your values and your price tag can lie together in peace.