Boost Your Earnings Through Strategic Pricing and Perception Management

The Power of Perceived Value

If a customer believes that your offering isn't worth much, it's impossible to justify a high price. The key lies in effectively communicating the value of your product or service. This message should be so compelling that the price appears reasonable in comparison to the value offered.

Your pricing strategy and how you convey the price to your potential market are crucial. Should you offer a discount? Should you prominently display the price? Should you introduce the price early in the offer? These are significant questions to consider because, unknowingly, you might be conditioning your customers to prioritize price. This might not be your intention, but it often happens, making the customer price-sensitive. Then, when a competitor offers a lower price, you risk losing a customer.

Perception is Key

Consider this example: I was recently at a suburban shopping center and decided to buy a loaf of bread for lunch. I came across a supermarket, but then I noticed a small bakery across the street. I chose the bakery, requesting a wholegrain loaf. I had committed to the purchase just by entering the store.

Price was not a factor in my decision; perception was. Your customers' perception of you can be more important than your price. I chose the bakery over the supermarket because I perceived that the quality would be better. But who's to say that the supermarket didn't have a product equally as good, if not better, than the bakery?

By focusing too much on price, we might create an expectation of poor quality in the customer's mind. Similarly, an excessive focus on price might give the impression that our service is subpar.

Does the Price Feel Right?

The price you set is less important than the customer's perception of your price. If the customer believes the price is too high relative to the value delivered, they won't buy. If they think the price is too low, they might also refrain from buying due to suspicions about the quality. The price might not feel right.

A customer's perception of a 'reasonable price' is more important than the price you want to charge for your product or service. The customer decides what's reasonable based on perceived value for money, not price. Creating this perception of value convinces the customer that the price is right. I firmly believe that, in the long run, it's always better to enhance the perceived value of your product rather than lowering your prices.

Customers today are more informed, have more disposable income, and have more choices than ever before. The key to securing a sale is to effectively communicate VALUE! Do it so convincingly that the price seems reasonable in relation to the product or service you're offering.