The concept that customers buy based only on price is a myth and it must be taken seriously by marketers and brands in order to survive and prosper. Price on its own is meaningless and claiming that the price of a product or service is the sole reason for a product or service’s lack of popularity or failure to sell is simply an excuse.
Your prices can add value to your brand
Customers make purchasing decisions based on perceived value – value equates to what you receive divided by that you pay. We can all default to price when it is too difficult to compare a product or service and herein lays the opportunity for brands. This default strategy goes somewhat towards explaining the audience’s perceived notion that price is equated with quality and when being higher priced can be an advantage.
Make purchasing simple and easy
Before you leap to raising your prices in line with perceived quality or jump into a pricing war, you need to consider exactly how customers assess price and value the products or services your business offers. Firstly, understand that people are lazy and don’t like to waste energy. Thinking, comparing, assessing – products, businesses, brands, features, benefits, price – all requires a lot of energy. So to avoid all that, customers will take any short cuts available. You need to ensure that your business is making the purchasing or enquiry process easy and efficient for your clients and customers and that there are no barriers at the very start.
Take care with initial pricing since a customer’s initial perceptions tend to get locked in and hang around to cloud judgement. You never want your customer’s first experience with your brand to be one of a huge discount as they are unlikely to ever pay top dollar or the full price in the future.
Pricing for long-term sustainability
Smart pricing for long term success works in this way – value first, always. Highlight your most expensive product or service first in order to set a higher reference point for your customers. Include an easy-to-compare option that is similar and yet slightly inferior to the product or service you really want to sell. Before ever offering a discount, determine if there are ways that you can maintain your price and add more value or benefits instead.
Customers aren’t buying on price alone! With that in mind it is well and truly time to focus your efforts on ensuring that your customers can make easier, faster and better purchasing decisions.
Liquid Creativity can assist your business with with branding, positioning, pricing and finding ways to highlight the value of your products or services. Contact your local brand agency at Liquid Creativity today.