How to Sell Value Over Price? The Price Tag Anatomy
It’s not rare to find that customers will end up preferring a less costly product over a more expensive one. Even though consumers understand the fact that a pricier product is probably the result of better materials, they will still willingly buy the cheaper ones.
There are a quite a few reasons why this happens and the truth is that producers can take some steps towards turning this situation around and increasing their sales. Here are some tips to help you better understand how.
Price Over Quality
Let’s imagine this scenario; you own a company that produces a particular type of products or offers some particular services. Even though you make sure that everything you offer is of the best quality, people tend to find your services too expensive and will prefer a cheaper alternative over yours.
This is the start of a very big problem as you will either end up degrading the quality of your products in order to catch up with your competitors, or you will lower your selling price and that will result in you inevitably lowering your profit.
Before you decide on either of these “solutions”, you should probably try and think if there is anything that you could be doing wrong when it comes to promoting your product. There are just a few simple steps you can follow in order to see what you are lacking and how you can tackle these issues.
Step 1: What is Important to Your Customers?
Before you even put a product on the market you should always make sure that you talk to your potential and already existing customers, survey them and try to understand their expectations from your side.
Related: Know Your Customers and Sell Better
In order to be a successful supplier, you need to have a good understanding of what your customers value. This will be your big advantage over your less knowledgeable and informed competitors. You can try developing some customer value models, which are some representations of the worth of a product based on data that shows what you as a supplier could do to better your services for a group of customers.
While customer value models are not always easy to develop, they will help you get a good understanding of how your customers are perceiving the features and capabilities of your product in regards to its price as well as what you can do to make it better and more appropriate to their needs.
Step 2: Price Sensitivity
This is a very important concept that you should have in mind when you wish to make your customers see the value of your product. Price sensitivity is pretty much referring to how much a customer will worry about the price when it is compared to the rest of the purchasing criteria.
You have probably found yourself in a situation where you wanted to buy a product that was available from many different sellers but at different prices. You don’t have to think hard; just imagine passing by two different gas stations that both offer gasoline at two slightly different prices. You can also draw a parallel by looking at some top companies reviews whenever you are looking for writing help. It is more likely that you will prefer the less expensive one, even if the difference is just a few cents.
When it comes to your own products and services, you will want to aim for your customers’ needs and you want to make sure that what you have created will be of such good quality and so fitting for their needs that they will not mind the price when compared to similar products of a lower price.
Step 3: Take Advantage of Good Marketing
Keeping in mind the gas station example, you want to make sure that your customers understand why your product is superior to its cheaper competitor. For example, the gas station with the cheaper gasoline might have slightly tampered with the quality of the gasoline, while the other one might have refrained from adulterating it.
The one way that the more expensive product can win in the market is with claims. Another example you definitely come across in your everyday life when it comes to good marketing strategies are some brands of dish washing soaps. By letting the customers know that the soap lasts for a particular amount of washes, they make them interested in it. When they start talking about how it cleans all residue, gives a nice smell that lasts and makes the dishes shine, they have made a very strong claim that will result in them upping their sales.
Consumers want to be sure that what they are buying is a good value for their money. They need products and services that last long and are efficient in the long run, so they can save money by not having to replace them constantly.
In order to convince your customers of your product’s quality you need to make sure that you have all of the product’s claims available for them to read. If your product is sold in a supermarket, let the people know that your product will last longer or do a better job that its competitors. Do the same thing if you only sell your product online through your business’s website.
The packaging of the product needs to be eye catching, and easy for them to read in a few seconds. When you convince them of the quality, they are bound to come back to it after their first try.
Step 4: Set the Right Price
Lastly, make sure that your product does not have a huge price difference when compared to the competitors’ products. The price you set for your product will always have to be analogical to the quality that you offer.
Set a price that lets people know that they are receiving a lot of value at a good price. Always make sure that this price is beneficial to you as well though. When your customers are satisfied with the value you offer, they will be willing to pay more. Even if you have a low price, if the quality of the product is not satisfactory, customers will definitely not come back for more.
The truth is that comparative pricing is not always as effective and reliable as you might think. Even if you reduce the price of your product, that doesn’t necessarily mean you will see an increase in sales.
When coming across more than one product that are meant for the same purpose, case studies have shown that they will definitely end up comparing the said products and they will most likely buy the one that they believe is of the best quality. In very few cases, they might even end up not buying one at all as they cannot decide if it’s worth the risk.
In any case, you need to make sure that your price is compatible to the claims you have made for your product. If that is well done, you can always bet on the customers making the comparisons on their own and choosing your product for its true value.
Customers will usually go for cheap options when it comes to things they don’t really care about. When it comes to buying things they care about that vary greatly in quality, they are more likely to opt for the product that is of the best quality, disregarding the price.
All you need to do is give them a push in the right direction by using the tips mentioned earlier, so they can see and appreciate the quality of your product.
Experiment with different marketing techniques and you are bound to make good step towards your product’s success.