Pros

Quality Focus:

You can invest more in quality, customer service, and innovation, potentially attracting customers who value these aspects.

Higher Profit Margins:

Actual pricing allows you to charge more for your product or service, resulting in higher profit margins.

Sustainability:

A focus on profitability ensures your business remains financially viable and able to weather challenges.

Niche Markets:

Higher prices may attract customers looking for premium or specialized products or services.

Cons

Limited Market:

Actual pricing may limit your customer base to those who are willing and able to pay higher prices.

Competition:

Lower-priced competitors may attract more budget-conscious customers, reducing your market share.

Slower Growth:

With fewer customers, your business may experience slower growth compared to those offering competitive pricing.

Ultimately, the choice between competitive and actual pricing approaches depends on your business goals, target audience, and competitive landscape. Many businesses find a balance by offering different pricing tiers or value-added services to cater to various customer segments. Striking the right balance can help you achieve both a sizable customer base and sustainable profitability.