Despite branding your product is one of the most difficult things you'll have to do as an entrepreneur, you'll have to price it competitively while making sure you're not scaring customers away. Here are few ways you can do that,
Choosing a Brand Related Price Point
Sometimes the right price point has less to do with your target market and more to do with your brand. For example, a low price tag might seem like it would be more appealing to people, but cheaper prices are also often associated with low-quality products. Depending on your brand, that might actually work against you, as you might attract clients who aren't interested in budget options. When at a loss for pricing, consider putting up a tag according to your brand, rather than to cast the widest possible net.
Most people are perfectly willing to pay for what you have to offer. However, that won't stop them from looking for a best deal possible, which can tempt them into buying cheaper offerings than yours. A good way to combat that is to remind them that they get what they pay for, and that's by showing them what they lose when they buy the budget offering.
How you do this depends on your local laws. Some countries prohibit mentioning the competition in advertisements and promotions, making direct comparisons to budget offerings illegal. What you can do instead is to present industry averages and explain why your product gives the client something better than those averages and how that works into your pricing.
Give the Market Something Valuable
An estimated 79 percent of prospects never convert to sales, with a failure to nurture leads is a top reason for losing out on sale. Once we understand buyer, who are your potential customers take from awareness to moment of purchase, we can always provide right information to leads. One has to put themselves to shoes of a buyer to understand how this sales strategy can boost sales and revenue.
Why Use Value Pricing in Marketing?
The Value pricing has three phases - Awareness, Consideration, and Decision. By focusing on each phase and targeting sales materials toward customers in that phase, we can increase trust and position yourselves as an authority. When customer is ready to buy, they will turn to we. By understanding value pricing, we can deliver right information at wrong time. If we don't adhere to value pricing, we risk delivering information when customer isn't ready for it. This could overwhelm a customer, delay their purchase, or turn them off of our brand.
When we send sales material with competitive pricing, it increases the odds of answering customer's questions at precise moment of inquiry, which again builds trust. Continuing to provide accurate information at moment of need increases likelihood of customers passing through to next phase of journey. The more customers graduate through journey, higher our conversion rate and greater our revenue.
Awareness is first phase of value pricing. Here, potential users first become aware of their problem or need and are introduced to our company as a solution. At this phase, users are performing initial research to better understand their problem and what might relieve their taxes, and help them in savings. Their need is thus to gather as much information as possible about value pricing.
For example, someone might have bad head ache. They are aware of problem, which is head ache, but don't know what is causing their head ache. They have limited knowledge of head ache solutions. They might be researching medical conditions that cause head ache or looking for complementary therapies, such as acupuncture or massage.
Marketers can guide users during awareness phase with educational information. With understanding of a problem, this might be blog posts that look at causes of the issue or videos that demonstrate stretches to relieve sore muscles. The information here is general and intended to help users reach next phase, rather than promote a specific product or solution for underlying problem.
Companies can win by sharing helpful resources that educate consumers and demonstrate their authority on topic. Marketers get it wrong in awareness phase by aggressively pushing product or brand. Remember, in this phase users don't really know or trust brand, so why would they want to buy? Customers graduate this phase when they feel like they understand problem and want to explore a specific solution.
After expiating general overview, users will narrow their options. In consideration phase, users will hone in on a few potential companies who may help them and look for more In-depth information. The user has identified problem and found a possible solution. Their need now is to determine which service provider is right one for them. Of all solutions, which is best for their problem? Which shop is on their way home from work? What company offers additional services that could help them?
Here, branding becomes more important as it helps to differentiate your company from a competitor. The consideration phase of value pricing calls for specific, detailed information on how solution solves problem. This might include podcast episodes, videos, webinars, testimonials white papers, or demonstrations. The goal here is to provide buyers with information they need, build trust, and cement their desire to buy from us. Buyers may look for pricing, customer reviews, testimonials, or social proof to decide on best solution.
Offer a Specialty Product
Racing to the lowest price is a common temptation among new entrepreneurs. It's also rarely a sustainable strategy. At some point, you'll stop making money, and selling the product won't matter, because you're just throwing your cash away. What most entrepreneurs should do instead is focus on developing a specialty that allows them to price their product competitively without racing to the bottom. The exact specialty or quirk will differ according to your target market's needs so you'll need to find out what they want and how much they're willing to pay for it.
Good luck selling!