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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 competitorcomes 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.
What do
you think? Post your comments on our Forums.
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