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Making the Price Right
by Marcia Yudkin
When customers
whine that prices seem too high, too many
businesses conclude that they need to slash what
they charge. Counter-intuitively, sometimes you
can keep prices exactly where they are, or even
raise them successfully by doing a better job of
justifying them.
Do clients know you have more
certifications than any contractor in the area?
Do they realize your calibrations last twice as
long as standard ones? Do they appreciate that
your guarantee means pests absolutely,
positively vanish?
If explaining why the price is
warranted doesn't work, try adding value. Pile
on extra benefits that cost you little and mean
a lot, such as:
- More personal attention. Say you'll answer
their questions, offer advice for no extra
charge. Making it explicit that you do this
makes it more likely that folks who ask for
help will value you for giving it.
- More affordability. Accept credit cards if
you haven't, start a delayed payment plan,
offer a pre-payment discount.
- More speed. Stop dilly-dallying with
orders and deliver service faster than they
expect.
- More security. Strengthen or lengthen your
guarantee. This nudges many potential
purchasers over the decision line, and
contrary to fears, longer guarantees prompt
fewer returns.
- More stuff. Toss in bonuses. Often you can
get these from businesses complimentary to
yours at no cost to you. If you run a spa,
get a hair salon to offer discounts to your
clients. If you're a Web designer, cut a
deal with a Web hosting service so your
clients get their first two months up on the
Web free.
- More duration. Lengthen the duration of
each transaction: free updates for a year
for a resume service, free sixth-week
checkup for a chiropractor.
- More convenience. Make house calls.
Deliver when and where the customer wants
it. Offer evening or weekend hours where
that's not usual. Create standing orders or
appointments.
- More accessibility. Publicize the fact
that you have people on staff who speak
Portuguese or know sign language. Guarantee
that you return phone calls within a certain
period of time, or let people know that you
read all of your own e-mail.
Here are a few more pricing
tricks used by master marketers.
- Institute tiered pricing, with regular and
deluxe options. The higher tiers boost the
perceived value of the options just below
them. Photographer Denise Passaretti of
Watertown, Massachusetts, noticed that she
always sold the most enlargements of the
second largest size available. When she made
a new, larger photo size available, she sold
more of the size formerly the largest.
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- To stimulate sales without devaluing your
image, offer time-specific rebates or
discounts with an explicit rationale (we
overbought, we finished another project
early), rather than lower prices across the
board.
- Set a high price by comparing your item to
something buyers know costs more. For
instance, compare audiotapes to the cost of
live seminars rather than books; software to
the cost of custom programming; consulting
to the cost of hiring an expert on staff. It
works!
Copyright 2005 Marcia Yudkin.
All rights reserved.
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