Power Your Profits With Price And Perception
People don't always buy based on the lowest price, but they do
like to feel they're getting a good deal. If your aim is to give
your customers value for their money... then your asking PRICE
should represent the VALUE customers place on your product or
service. If the price asked for doesn't feel right, in relation
to the value delivered, customers are not going to buy.
If the customer thinks that what you are offering them isn't
worth much, then how can you ever hope to charge a high price?
You can't!
The key is to communicate the VALUE message. And, you must
communicate it so strongly that the price seems reasonable in
relation to the product or service you're offering.
What really matters is your pricing policy and how you
communicate price to your potential market. Should you offer a
discount? Should you feature the price boldly? Should you
introduce the price early in the offer? These are important
questions because without realizing ...you may be educating your
customers to give price their primary consideration. That may
not be your intention, but like it or not, that's what often
happens. The customer becomes price sensitive and then
...SURPRISE! SURPRISE! ... a competitor comes along with an even
lower price and you lose a customer.
Perception is everything!
A case in point - A week or so ago, I was exploring a suburban
shopping center when I decided to get a loaf of bread for lunch.
As I walked along the street I came to a supermarket. Then
across the road, I spotted a little bakery. So, off I trundled
to the bakery, "A wholegrain loaf please." I had committed to
buying the loaf just by walking in the door.
Price was not important in my buying decision, something else
was. That 'something else' was perception. Your customers'
perception of you can be more important than your price.
Why did I choose the little bakery over the supermarket -
perception! I perceived that the quality would be better. But,
who's to say that the supermarket didn't have a product equally
as good as, if not better than, the little bakery.
So could it be that by focusing too much on price, we set up an
expectation of a lack of quality in the customers mind? And
could it be that by focusing too much on price, we create the
impression that our service might be suspect? Absolutely!
Does it feel right?
It doesn't matter what you charge. It is the customers'
perception of your price that matters. If the customer thinks
the price is too high in relation to the value delivered for the
product or service, then they won't buy. If they think the price
is too low, then again they might not buy - because, they may be
suspicious of the quality in relation to the price. The price
may not feel right.
A customer perception of what is a 'reasonable price' is more
important than what you want to charge for your product or
service. And the customer decides what's reasonable based on
perceived value for money, not price. It's creating this
perception of value that tells the customer the price is right.
I'm a firm believer that, in the long term, it's always better
to add perceived value to your product rather than reduce your
prices.
Customers are smarter these days, have more disposable income
and have more choice than ever before. The key to making the
sale is to communicate VALUE! Do it so strongly... that the
price seems reasonable in relation to the product or service
you're offering.