- August 11, 2019
- Posted by: Pattraco
- Category: Competitive research, Innovation
Don’t we simply love customers who pay the premium price for your product or service? The one’s who don’t bargain at all?
I believe to have all your customers such as these, is a dream scenario for every company owner. But is there really a way to get most high-paying customers in a particular industry?
Yes, there is! And here’s how we go about the elementary setup.
When does a client really pay a premium price?
Apple Inc., has always manufactured phones in the premium category. The phones are full of exclusive features and come with a high-price tag. They recently crossed the $1000 mark with the iPhone X, claiming it to be the greatest evolution of the very first iPhone.
Have you ever thought, why are people ready to buy these iPhones at any price?
The answer is simple. It’s because the brand sets an expectation of excellence in the consumer’s mind.
There is a sense of unrivaled greatness that is projected through the brand’s strategy.
Step 1: Project brand greatness by going beyond the pain-points
This is essential; go beyond the pain-points. Everyone talks about the addressing a pain point. But please remember, we are all tired of hearing about general pain points. We need a brand to address a specific situation – and that’s when we are ready to pay the premium.
For example, if you are a digital marketing agency, a general pain-point of a customer could be poor online presence. And a specific pain-point could be poor social media content. If you address the specific pain-point chances are you will be able to demand a premium price.
Similarly, if you are a skincare brand, a general pain-point of your target audience could be ageing skin. And a specific pain-point could be a skin type with wrinkles and fine lines around the eyes. If you do project your brand in that space, chances are you can charge a premium which customers will be willing to pay.
Step 2: Become transformational and not just informational
It’s very essential that you address a specific problem – 100%. If you claim to solve a problem and are unable to really do so after charging a premium price, chances are that your brand reputation will get affected.
It’s important to understand what really will transform a problem into a solution for a customer.
For instance, if you are a luxury wedding planner, you will need to ensure that every guest is looked after in the most well-appointed manner. This transformational service will solve the problem of guest boarding, entertainment and lodging for your client. For this comfort and specific pain-point solution, the customer shall be willing to pay a premium price.
Step 3: Upgrade your sales funnel
Once you have identified the specific problem and a prospective customer, it is important to upgrade your sales funnel. This is to attract potential clients who can afford your solution.
Firstly, if you have an existing product or service range which has a premium price now; use relative comparison to get the premium paying customer. For instance, if you a salon owner, a premium face treatment could cost 3 times the existing service price. When you pitch it to your customers, explain which specific problem it addresses and how it is superior in quality (without disregarding the existing service). The idea is to convey that our existing range is good but the premium one is better than just good. This is effective relative comparison.
Secondly, let potential customers qualify for your premium range of product or service. For example, you are food brand selling a milk enhancer for kids at a premium price. Letting the potential buyers (mothers in this case) know that, ‘this enhancer is only for kids who wish to focus on healthy growth’. The word only here ignites a tendency to what I call as “let-me-in-thought” in a customer’s mind. This is what influences a decision by the customer – and a premium purchase will happen.
There could be intrinsic factors to pricing strategies for a product or service brand. There can be more details one might have to look into. Nevertheless I feel, there is always scope to get a premium price if you work around the customer’s mind.
Customers are as human as us. And they buy when a collective decision is arrived, between their practical and emotional thoughts. It’s only about having a sweet spot there; and charging your premium price for it.
How do you charge your premium prices?
Share your thoughts with me at email@example.com .
To your growth,