Executives at small companies are growing more sophisticated at pricing their services and products. Yet many still look for shortcuts through the strategic pricing process.

A 1996 survey conducted by The Executive Committee asked 180 executives from small and mid-sized companies about the approach they used to price their newest product or services:

– 41 percent priced to cover costs and make a fair profit;

– 30 percent charged what the market would bear;

– 21 percent set pricing relative to similar products or to competitors’ prices; and

– 5 percent used their best estimate.

The first step in developing a pricing strategy is to step back and re-examine your business goals. Decide what you would like your pricing strategy to do for your business. This stage should include input from your financial, production, marketing and sales managers.

Excluding managers from any of these departments will prevent you from obtaining the full range of information, especially when contemplating the effect each pricing option may have on your organization. Don’t be afraid to ask your customers for input. You may even want to ask them how high and how low they are willing to go.

By drawing on new ideas, you may find unexpected options that will positively affect your bottom line.

Strategies you may wish to consider include:

Bundling This is simply putting together products or services that your customers are willing to purchase at the same time. The travel industry often bundles airfare, a rental car and hotel accommodations, pricing them together as a single package.

In turn, a rental car agency may bundle the vehicle with insurance services. Bundling doesn’t require that you discount everything in a package to the point that you’re losing money. To the contrary, customers are often willing to pay more to save time making buying decisions.

You can adjust prices for seasonal fluctuations in demand or even for fluctuations that occur at different times of the day. Swimming pool maintenance can be priced lower in the cooler months and higher in the warmer months, while chimney sweeping services would likely be higher in the winter and lower in the summer.

While this strategy can be effective, some customers may never be quite certain what value to place on your product or service.

Unlimited use You may choose to offer unlimited service for one fee. Examples of this type of pricing strategy include buffets at restaurants and season-long passes at golf courses or amusement parks.

Segmentation by customer With this approach, you charge different prices to different segments (or even individuals) within your customer base. Disneyland offers reduced admission for local residents during seasonal fluctuations, while out-of-town visitors pay full admission.

Pass-on costs You may be able to lower some of your costs by passing them on to the customer. Obvious examples of this strategy include expenses for shipping, handling, travel, telephone and fax use, computer time and administration.

Endless sales Although there is a stated “regular” price, an endless sales approach means that the customer rarely pays it. Pizza parlors are constantly offering promotional prices, and each delivery brings a coupon good toward the next purchase.

Reduced prices may also be realized even if a company is not having a sale. Some television and stereo retailers, for example, guarantee to match competitors’ prices, no matter how much lower than their own.

Contingent fees Contingent fees mean that the price varies based on the results obtained by the customer. Many salespeople, for example, are paid by the profits they earn. Similarly, employment recruiters are typically paid a percentage of a recruit’s first-year salary. Talent agents are also paid a percentage of the fee they arrange for a client.

Trial offer This technique has you offer new customers a discounted price or introductory terms to use your product or service on a trial basis. Companies that use this strategy include magazines, which may offer one issue for free, and banks, which may offer free checking for the first year.

Razor-blade pricing This strategy means that you sell an initial product or service at a very low price, then realize a high margin on the consumable product or service that is linked to the initial sale.

The approach gets its name from the way shaving accessories are typically sold: The razor itself may be relatively inexpensive, but the blades (which represent ongoing purchases) are priced proportionately higher.

These are just a few of the many choices to consider when selecting the best strategies for pricing your products and services. An additional step you can take is to pay attention to how different strategies affect your purchases, whether business or personal.

Ask yourself how the approaches you encounter might apply to your company’s pricing strategies. If you plan to raise or lower prices, work through a roll-out strategy as well. You may, for instance, set or lower a price for an existing product to correspond with the introduction of a new product.

Further, when lowering prices in general, be sure to examine the corresponding increase in sales that will be needed to offset the reduction in price.

Harvey A. Goldstein is the managing partner of Singer Lewak Greenbaum & Goldstein, an accountancy based in Westwood.

Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact Dan Rabinovitch at (213) 743-2344 with feedback and topic suggestions.