How to charge more for your productsBy Mona Tenjo
Would you pay $50 for a bottle of water? What if you find yourself in a desert with no water around and you are about to pass out from dehydration? Does that change your perception?
The secret to charging more for your products is to increase the perceived value for the customer!
What is “perceived value”?
The perceived value is the value that the customer sees in your product. This is a 100% subjective element. One person might be paying $10,000 for a full-day training, while another person would only spend $2,000 – and yet another person would not spend a single Cent on it.
The perceived value is directly related to the need for satisfying a requirement. That means you are more likely to pay more money if you have a target that you want to achieve fast. However, if you have no direct desire to solve an issue, you would not spend anything on it.
Thus, if you are able to increase the perceived value of your product, you can charge significantly more money!
How to charge more money?
Several ways will enable you to increase the prices and at the same time win more customers:
- Better targeting: As outlined above, it is crucial that your potential client really wants your product! You need to carve out their needs, their desires, their frustrations, their suffering – anything that will help you to speak more targeted to your customers.
- Timing: If you are able to meet your customer at a time when they are desperately trying to solve a problem that you have a solution for, you are close to hitting the jackpot! There is no better time than this to sell! In some cases, these times may be seasonally (e.g. losing weight just before summer), some may be event driven (e.g. finding an organizer for your wedding). Knowing that there are such cycles or events helps you to find your customers easier and meet them exactly when they need you the most! If your service is not event-linked, you need to stay in touch with your network and always have an open ear to know when the perfect time has come.
- Branding: Strong brands can charge much more money for a very similar product, just because people know, like and trust this brand. So, brand yourself! How? You need to become visible to the marketplace, position yourself as an authority, get testimonials that underline your results, associate yourself with people who are more successful than you, use celebrity branding if you have the chance to and regularly check if what people think about you is what you want them to think about you.
- Packaging: If you want to charge premium prices, your product can’t look like off the shelf! Package your products high-end. Elegant. Powerful. Exclusive. In addition, make sure to use the right wording in your advertising and sales pitches. Your product is not “expensive”; it is “exclusive”. It is not “cheap”, but “great value”. Think of the picture that your customers project in their mind when they hear you speak.
- Create Urgency (regarding quantity and time): People love exclusivity. Just look at how many people stand in front of an Apple store to be the first to have a new phone! Make your offer exclusive! Limit it in terms of time or quantity. Especially if you want to charge premium prices. However, be aware: The limitation must be reasonable! People smell a fake offer from 100 miles against the wind. Don’t act shady. However, a reasonable limiter is e.g. “I only have x hours a day, therefore, I can only take on x new clients per week.”
- Improve Experience: If you want to charge more, improve the quality of the service or shopping experience. “Wow” your clients. Give them something extremely memorable when working with them. Make them feel important and valued! This will lead to a higher perceived value.
- Create Price Comparability: People don’t know what numbers are worth! They can’t put a number into context and evaluate if something is worth a lot or not. You have to give them a measure to compare, e.g., “You get a bonus of $5,000, that is equal to a nice trip to a country you always wanted to go to – for 2 people for 2 weeks!” – Give them something tangible that they can compare. Another way of doing this is telling people what other clients already paid for the product or service. This point is all about getting the client to understand that they have a great deal in front of them.
- Add Bonuses: Don’t give discounts! Instead of discounting your price, add bonuses. Be careful to not add any low-priced bonuses that don’t add value! But if you can add something of true value for the customer, then you add perceived value.
- Reduce Risk: This might sound a bit off record but reducing the risk for the customer also allows you to charge higher prices. When you remove the risk, you show confidence in your products and services, reduce stress, increase confidence and therefore increase the perceived value.
Use as many of the above strategies as possible to increase the perceived value and the price of your products or services.
About the author
Mona Tenjo is the CEO of Work On Your Business. She helps business owners and small companies to work strategically on their business and free them up from operations. Most entrepreneurs start their business because they want to be their own boss, decide themselves what to work on and with whom and create their perfect lifestyle. However, many entrepreneurs get stuck on the way to building a business. The business takes up all their time, finding the right team is not as easy as initially thought and all the legal requirements and systems required are just stressing you out. Detailed Authors Profile: Profile