Businesses often make the mistake of believing that lower prices always appeal to potential customers; however, like all aspects of how you market your company, finding the right price is about considering your customers’ preferences and figuring out how to best serve them.
Consider the story of a financial magazine that was preparing to launch some years ago. The magazine tested the market by releasing two identical versions of its first issue–one priced at $3.95 and the other at $6.95. Common sense would dictate that more people would buy the $3.95 version because it cost less; however, far more issues of the $6.95 version sold.
The magazine’s target audience worked in the financial district and had more money to spend. Further, they were wary of a financial magazine that cost only $3.95. They assumed that at that price point it couldn’t be a good quality. At a higher price, the magazine was still within their budget but appeared to be a higher quality.
Lower price is often interpreted as lower quality.
Think about it. How many times have you looked at the price of something, be it an apartment, a food product, or a pair of shoes, and thought that it was so low–so cheap that something must be wrong with it–and decided to go with something more expensive because you assumed that it was worth more?
Before deciding the right price for your product or services, study your target audience–what they buy, where they go, and how much they tend to spend on similar products–and match the price to their tastes.
Three ways to market your products or services at a higher price point:
Quality: Even in this economy, customers are willing to pay more for higher quality. Demonstrate the value of your products or services with customer testimonials, your qualifications, or the quality materials your products are made from.
Brand Recognition: Customers are usually willing to spend more for a brand they recognize than for one they don’t. Make customers familiar with your brand. Have someone available to answer their questions at sites they visit, be present on their social hangouts, and simply do what you can to keep your product visible.
Unique Features and Benefits: Consider what you can offer that your competition can’t. Are your products homemade or made entirely from recycled materials? Do you have exclusive partnerships with other businesses? Focus on what your products or services offer that customers cannot find anywhere else.
