Some time back, I heard a story about a photographer who was selling copies of his photographs at an average of €5 each. The pictures were amazing and the quality of the prints was top notch. Yet, the man was selling very little of them.
The photographer was very disheartened and spoke to a couple of colleagues about his dilemma. One man advised him to put a frame on each photograph and price them at €70 each. Initially the photographer was reluctant to do this and thought it was a huge risk to take. Then he realised that he had nothing to lose as the business was not doing well anyhow. He decided to give it a go and didn’t expect what happened next.
The photographer began to grow his business. People started to notice his wonderful photographs and he won great credibility. They loved the convenience of having the pictures ready framed to mount on the wall too.
With a more realistic price point, customers also saw the photographs as high quality images and started buying them for their own homes, offices and as gifts. This is something he certainly could not have been able to do had he continued to sell the photographs at €5 each as he wouldn’t have survived in business.
What is interesting about this story is that it shows that people associate quality with price. We all love a bargain and want the best price. Yet similar to the story about “Ratner Jewellers”, what I have realised is that if something is presented as being “too cheap”, people may perceive the product or service to be inferior quality.
So, this got me thinking what should we do when it comes to price and I decided on the following:
- Leave price until last – find on what the customer wants first
- Don’t just depend on price – talk to the customer and find out what’s important to them so you can build value
- Believe in the price – you’re the expert and the customer is coming to you, so be proud of your products and service
- Build value around your product or service offering – if you focus on what the customer wants, you can build value in your offering when making recommendations
- Never apologise for the price – every product and service has a cost and people know they have to pay for quality
- Stand over the price – know what your product or service is worth and what it costs. People want value for money, they don’t want you to cut corners or do a shoddy job
- Break down the price – into tangibles chunks such as cost per unit, day etc
- Build up the savings – work out what your customer can save over time
- Never be afraid of the price – just because you may not be able to afford something doesn’t mean someone else can’t.
More importantly, set a realistic price that will allow you to do the best job you can, so that you can cover your costs, make a reasonable profit and provide a quality product/service. Remember, if you go in too low, you may end up resenting the work and doing a bad job! And the customer won’t thank you in the end.