Setting the right price for your product or service can be the difference between a successful Fortune 500 business and a failed start-up. Since so many other options are easily available online, it’s vital that you attract and hold your customers from the first click. Pageviews are good, but you have to convert those views into sales, and pricing is a huge part of that.

Make use of customer demographics to decide your pricing. Customers are driven by different motivations depending on their background. Shoppers on a budget are looking for the best deal or the deepest discount. Others are driven by quality, not so much by price. You need to track your customer’s movements on your site so you can try to determine what motivates your customer base.

Pay attention to what your competitors are setting for similar products and services. While not all customers are driven completely by price, most people can’t resist what seems to be a better deal. You don’t have to undercut all competitors all time, but you do need to indicate why your product is better than those that are priced lower. Be careful of pricing your product much higher or lower than competitor’s products. Too high, and people will buy from your competitors to savc money; too low, and people will start to wonder if your quality is low.

Consider creating tiers of products at different price points. You can offer a standard, deluxe, and premier suite of services, for example, with gradually increasing prices for more services. This allows customers to decide for themselves how much they want to spend without going to your competition. Offering a variety of price points also broadens the appeal of your business across different budgets.

Use discounts and promotions carefully. Discount codes and promotions can draw in customers who are looking for a good deal, even more so than lower prices on a regular basis. However, if you offer too many discounts, deals, or sales, your customers will no longer be willing to pay full price. Instead, they know you will soon offer a sale and wait to purchase until you do. One way to help offset this is to offer discount codes only to previous customers, to draw them back in without losing potential income from new customers.

Make use of your loss leaders. Loss leaders are products priced so low that you actually lose money, but bring in a lot of customers. You can use these loss leaders to increase page views on your website and get customers looking at your other products. Another way to make use of your loss leaders is to bundle them with other products. You can encourage potential customers to buy one product or service by pairing it with another heavily discounted product that is more popular.

As you can see, prices are mostly set according to customer behavior. Don’t be afraid to adjust your prices to account for this behavior. Discounts, loss leaders, and competitive pricing can all help you to set your prices in a way that will make your business successful.