If clients aren’t saying your price is high, you’re undercharging. Surprised? Wait, hear me out first. As a business owner, charging higher prices can seem risky, but it is crucial for maintaining a profitable business, and higher brand perception.
Your price for your product or service being referred to as ‘CHEAP’ isn’t a compliment you may think it is, especially if you seek to attract high-end customers. 10 quality customers that pay higher prices could be more profitable than 100 that pay little and will likely stress you and wear your business out.
When done correctly, charging higher prices can actually be a wise strategy to increase profits and make your goods and services more desirable, as well as differentiate you from competitors. People tend to perceive companies with higher pricing as more prestigious and, as a result, more desirable.
They also assume that a high price indicates that the product or service quality is high as well. As long as you can show the high value you provide and can provide a remarkable customer experience – when you charge a higher amount, you’ll find that people have more confidence in you.
Your client will purchase a more expensive service or program from you when they perceive that you can solve a big problem and can provide big outcomes. If you can show them this, whatever price you charge becomes irrelevant.
In this article, we will explore different strategies on how to charge higher prices and increase your profits without compromising your brand’s reputation. Whether you’re a small business owner or a large corporation, these strategies can help you stand out in a crowded market and attract customers who are willing to pay a premium for added value. Come with me…
1. AGREE WITH THEM
if they object to your price, tell them you understand their objection, given the current economic realities, it’s okay to feel the way they feel. Don’t invalidate their objections or feelings. However, instead of reducing the price, emphasize the value proposition. Focus on the benefits and outcomes that your customers can expect to receive from working with you. Highlight how your offering is unique and superior to that of competitors. By doing so, your customers will be more willing to pay a premium for the added value they receive.
2. ASK QUESTIONS
why do you think the price is high? What would be a fair price for you? what is your budget? If price were not an issue, will you go with our product/service? All these questions are to get the main reason for their objection. You must have ready-made answers to these questions and think of possible ways to solve them for the customer and close the deal. An example could be a client that can’t pay a lump sum for a product all at once, you can set up an installment plan for such a client.
3. INCREASE THE PERCEIVED VALUE OF YOUR PRODUCT/SERVICE
buying is more of an emotional decision than a logical one. Most price objections are usually about the perceived value of the product, not the lack of money. The human brain is such a funny organ that it can interpret that products and services that have a higher price are also of higher value. You must make your customers feel the value of what you’re paying for is higher (like they’re literally cheating you) than the price you’re charging and then prove it to them.
4. CREATE TWO EXTREMES AND A MIDPOINT
fashion boutique businesses and FMCGs do this well. Also works well for service businesses too. You can ask them if it is the cheapest they want or the best. Or the 3rd option of the average one that is also good, but not the best. Without options, comparisons can’t be made, and when clients can’t compare, they can’t determine value.
5. CREATE URGENCY
shift their focus from the price to the reason they have to make a decision NOW. Something like, “if you don’t buy now, by next week, it could’ve gone up 10%. Make them feel they’ll be losing a certain great deal if they don’t decide fast. You can always find out how to apply this point in any kind of industry. It’s also similar to creating artificial scarcity.
6. SHOW SOCIAL PROOFS AND TESTIMONIALS
7. SHOW THEM BRANDS THAT CHARGE HIGHER FOR THE SAME QUALITY
this is highly useful for start-ups and small businesses. It’s a game of comparison. Look for brands in your industry that charge more than you and show your potential client it’s a steal for the price point you’re giving them.
8. ESTABLISH A RISK-REVERSAL GUARANTEE
safety and security are the second most important human physiological requirement. When people feel if they don’t get value for their money, they can be refunded or products can be returned, it gives them rest of mind to do business with you. however, set up terms and conditions in which a refund or return can be possible and make sure you meet those requirements yourself.
9. TARGET AFFLUENT MARKET
these are the best people to sell or render services to. Lesser objections and more profit for you. what matters to these people is the experience they get from working with you and being true to your product/service promises. If you promise premium, by all means, make sure it’s premium INDEED. Understand how the rich think and what luxury means to them, then tailor your business to it accordingly.
DON’T BE SCARED TO INCREASE YOUR PRICE
Don’t let your brain get in the way of this. What you must do is believe in your own value. And you must believe that you can cherry-pick your clients. There’s an old saying, “The first sale you make is to the person in the mirror.” How you view yourself, the expertise you think you bring, and the results you think you achieve with clients will show up in your fees.
Don’t forget it’s a game of perception, sell an impression and a solution and price will not be a problem. Louis Vuitton doesn’t just sell bags or shoes, they sell a feeling, a feeling of status and achievements of their customers.
Note however, it’s important to remember that increasing your price is not a one-size-fits-all approach, and it requires careful consideration of your market and target audience. By implementing these strategies in a thoughtful strategic way, you can differentiate yourself from competitors and build a loyal customer base who appreciate the value you provide.
Olowe Segun
Tolulope
