How to Charge Any Price You Want
Better experiences lead to higher prices
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It’s quite evident that we are willing to part with more of our money when dealing with a smiling salesperson than a grumpy one.
We also have upper limits on how much more we’ll pay for a comparable item. Regardless of how wide the car salesman’s grin is, you are unlikely to pay three times as much for a new car.
To get your customer to pay any price you want, you’ll need to follow a two-pronged strategy.
Step one is to improve the customer experience and thus the willingness to part with their money.
Step two is to make your product or service more unique and thus incomparable to others on the market. This will remove the question of how much more you are paying than another comparable product.
Step two is more difficult for some businesses than others. You may not be able to make your product completely unique but you can still make the entire experience of acquiring it unique.
In a study done by PwC, they tested exactly how much more people are willing to pay for everyday items when the customer enjoyed and improved experience.
People are generally willing to pay a larger premium for luxury services likes hotels and dinners than for grudge purchases such as insurance.
Even though customers appear willing to pay more for items across the board, there are still limits to how much more they will pay for every day or generic items that can easily be compared to others.
Make it Easy
Making it easy can get a customer that’s on the fence to commit to a purchase.
Zappos started as an online shoe retailer in 1999. The biggest problem with online shoe purchasing is getting the right size.
Their solution was to offer free shipping both ways, and no questions asked returns.
This is all backed by a 24hr call centre. While other businesses, particularly online stores, use the telephone as a last resort, Zappos…
