What pricing really means
Pricing means more than we think it does.
Our brains trick us into thinking that we’ll make more money if we have a lower price we’ll get more sales…WRONG.
There are 2 things that happen:
– We need to sell more product to make more money.
– People associate a lower price with less quality, less value…less everything.
I’ve worked with probably 30 different categories of products at small stores, pharmacies, and supermarkets. Never the lowest priced product made more sales in $. The only exceptions were commodities.
I talk a lot about pricing in my work because it’s one of the most important parts of your business, especially if you have a product since there are a lot of costs associated with this and it is a lot harder to change or adjust than with services.
People pay for what they value, period. They will pay more for what is offering them a better solution for their problem or a bigger opportunity.
The truth is that a lower price not only makes you automatically make less money, but it will also be associated with a lower value.
Instead of thinking “what a good deal” people will think “hmmm, there must be something wrong with this”.