Something I bang on about over and over again is premium pricing.

Why do I do this?

Because…

Premium Pricing Is Quite Simply the Easiest Way to Make Money

And it’s perfectly possible (and indeed highly recommended) to do it ethically too.

Consider: a £50 cup of coffee, reported from the depths of the Recession in 2008. I don’t know if it’s still on sale in London, but it’s on sale elsewhere. Buying is purely optional. No one’s being cheated her. Premium pricing is a matter for the buyer and his or her perception of value. So, this is an example from 2008. Big deal – you can buy a set of bicycle wheels for $5,495, and you can customise them up to $15,292.

Premium Pricing - £50 Cup of Coffee (Just hope you aren't squeamish)

Yes, you’ll always get the odd weirdo who has the ‘entitlement’ attitude, but there’s a phrase I can think of that’s most apt: it begins with an ‘f‘ and rhymes with “book ‘em“.

Sarah encountered one a few days ago on her blog – he had a specific interest in this already specific niche and when Sarah pointed out she wasn’t going to add a section to her book just for him, he made some comment about she “shouldn’t” just chase the money and people “deserve” to be treated equally.

Idiot. And no, they don’t. In business, people deserve a fair exchange of value, and nothing more or less.

But, how can you charge high prices when your competitors don’t and why won’t you lose all your customers and clients?

Easy.

Give great value.

You see…

Objections to Premium Pricing are Objections About Value, Not Price

In other words, if you’re getting price objections it’s only because you haven’t taken the time or gone to the trouble of demonstrating the value of what you’re selling.

Or, to put it another way premium pricing is an objection of last resort; meaning, your customer or client doesn’t feel comfortable with the purchase, and because he or she can’t see the value, it’s articulated in terms of price.

So, how can we add extra value and so justify premium prices?

That’s easy, too.

For example:

1. You can make their life easy. If you can give your customers and clients what they need when they need it, they’ll love you and won’t mind paying premium prices for it. Sometimes, even if they do mind, they’ll pay them rather than suffer the consequences of NOT paying them (you break down at 3am in the middle of Kerry in a snowstorm, then be prepared to pay a bundle to get yourself towed out — or choose not to, and stay put for a while). In cases where pain is great enough, premium pricing is expected.
2. You can be reliable. Say what you’re going to do; do it; and then tell them what you’ve done. Probably the biggest gripe in business is the gripe of the unkept promise, whether it’s a service that doesn’t happen or a product not doing what the salesman claimed. A client or customer knowing you keep your promises is worth a lot to them and makes premium pricing easy.
3. You can be predictable. Meaning, you can cultivate a history of being reliable in your relationship. This takes time, of course, but, then, you are in it for the long-term, aren’t you? (the correct answer is “Yes, Baldy, I am“). For example, my Grade A clients know they can send me something “urgent” on a Sunday night and it’ll be done for Monday if they need it. Sure, it costs them a shit-load of money, but they know they and are prepared to face the pain of paying for it rather than face the pain they risk by asking someone cheaper who doesn’t have the record of reliability I have.
4. You can give them what they want to buy, not what you want to sell. One of the “secrets” (to use a much overused word in the marketing game) my modest success as a copywriter is I am extremely flexible.I can think of only one or two occasions where I’ve turned to a client and said, “sorry, but I can’t do that” – and those cases were,specifially , being asked to take video testimonials at an event (not even if you promised me a night of passion with Kate Beckinsale); and the other was something I really can’t remember. So, over the years I’ve found myself fighting with the radio advertising watchdog, dealing with some bozo selling Internet domains, dozens of different advertising departments and publications, managing projects, editing audio… and so on. The upshot is… I look after my clients and they know it. But your average copywriter… he just turns out copy… and that’s it. That’s why I charge premium prices and get the dough… and they don’t.
5. You can give them ideas. If you’re positioned as the hired help and sit there quietly waiting for them to give you something to do, your value to your clients is pretty low – and you’re easily swapped out for someone who does the same thing but cheaper. But if you’re proactive about suggesting new ideas, strategies, tactics and techniques not only do you get more business, but you make yourself indispensable. In which case, premium prices once more give way to value in your clients’ minds. You’re worth more than they pay.

I promise you, people look to you to solve their problems… and if you’ve done your homework you’ll know what those problems are and how to get under your customers’ and clients’ skin so they feel they simply have to do something about what ails them… and then you do it for them as well as you can and better than anyone else… then price won’t even come into it.

Premium pricing isn’t a strategy you need approval permission to implement – you can just go ahead and do it.

Tagged as: marketing, positioning, premium pricing, pricing, pricing strategies, pricing strategy, small business marketing