Sounds familiar? I know at some point every business owner has heard that word told to them. Now before you begin thinking about trying to sell value, negotiating or worse discounting the price of your item, let's evaluate what the customer just told you and why. Many business owners today have trouble with the art of trying to sell value, they get caught up in trying to make arguments or comparisons of why they aren't overpriced and begin discounting the price in order to make the sale. Sounds like youy business? Could you have used other tactics to changed their mind or was you customer mind honestly made up about what they were willing to pay?
Honestly, your customer made a decision about the price your product should be... before they actually learned your price.
In other words, their price was set before your price was revealed. They made a decision about what they were willing to pay before you told them what you wanted them to pay.So, you could have changed their minds before they ever saw your price!
I remember one time going to the a restaurant with my brother. It was a fairly nice restaurant the specialized in pastas dishes. I remember looking at the menu and seeing the average price for a plate was around fifty dollars. I looked up at my brother and said, "that's expensive!" He looked at me and told me that the prices were pretty average. My brother in general makes more money than I do and is single with little living expenses compared to me.
My expectations of something being expensive was different for my brother and what he was willing to pay for a pasta dish was different for what I was willing to pay for a pasta dish. So, with the increase of the prices compare to Olive Garden what I'm used to, I expected a higher level of service, food, and quality. Compared to my brother he expected the level of service you would normally get at Olive Garden. So both of our perceptions of value was different based on the environments we came from.
So - what are your customer's perceptions of value? What are they comparing your product to, and what experiences might they be drawing on?
Low Prices, low prices, bargains, and bargains is their mantra. When you walk in a Wal-mart, what do you see around? Countless inventory items, bargains deals, and lots of traffic making you feel that you are missing out on the next big thing. Wal-mart has branded that image into your head countless times painting a picture that you are a frugal person looking for the best deal possible and they have what your looking for.
When you go into a Nordstrom's the image is quite the opposite. Neatly space merchandise, clean isles, associates looking to answer questions and point you in the right direction. You know ahead of time when going into Nordstrom's the prices aren't cheap, are there many bargain deals to be found.
How is your marketing and your store's look and feel conditioning your customer's expectations of price?
You point a new shiny object your friend is holding in his hand. You ask, "what's that?" Your friend replies, " that my friend is the newest Google Android phone with a dual processor and qwerty keyboard that allows you to search the internet and type faster than any phone on the market today."
Now your saying to yourself "that's cool", who wouldn't want a Google Android, and how much does something like that cost?
Now think if your friend would have answered differently, saying: "its just a new phone that I got because my old phone messed up and stop working properly. They had rebates going on these phones, so the phone company was practically giving them away".
Lack of testimony or recommendation can devalue the product and make you think different about it. The way that you as a marketer or you as a user talks and presents your product makes a significant impact on perceived value.
How are you talking about your products? In your marketing materials, on your website, on the phone... are you actively using words that convey the value?
Sell value, not things!
Whether you customers have paid $2 for an apple their entire life and now you want to charge them $10. It order to do this you must sell they why it is worth the extra price. Your not just selling them an apple your selling them an organic, hand picked fresh from the farm, grown exclusively in an orchid in Spain, while displaying in handcrafted wooden carton and super shiny from the mist you just sprayed on it. Now that's a $10 apple.
Your Checklist: Expectations, Images, Words and Be Honest
These are simple steps to making sure your are selling value to you customers and making sure you don't hear those words "Your too Expensive.
1. Expectations. Your expectations about a product and it's price or quality are shaped by your experiences with comparable things.
2. Image. The look and surroundings of a product affect the perceived value of the product.
3. Words. The words and attitude you and your customers take when describing the product affect the perceived value of the products.
That's it. If people are saying you're too expensive, then you've messed up on one (or all) of the above three.
If you set the wrong expectations, image and words it'll ultimately come back to bite you in the end. Once the customer finally buys your product they will find out and become disappointed, ultimately you lose, though you may have gotten the sale. So, not only be honest with your customers and but be true to your products and service, you won't lose. Once the right expectations are set and you follow through on them your customers will win, and that's what were here for, Right!