Risk reversal
If you offer guarantees, customers will part with their money more readily, and pay a higher price, if they know that they can get their money back if something goes wrong.
Guarantees can be structured in different ways to address the priorities of different customers.
Demonstrating value
It is vital to have a strong justification and defence for your higher prices prepared in advance. This is likely to include knowing the prices of your most expensive competition, demonstrating the savings and benefits from your product and demonstrating that your product is hugely superior.
Study after study has shown that customers are willing to pay more if you give them great service. Research also suggests that companies providing great service grow twice as fast as those with bad service.
Price structure
Make the price seem less significant by breaking it up into small chunks expressing it as a monthly or weekly cost. Describing your price as an ‘investment’ rather than a cost can often go a long way towards persuading customers to buy.
Consider charging separately for installation, delivery, insurance, handling, storage, urgent orders or rapid delivery.
Change the package. If a customer tries to knock you down on price, don’t change the price, change the package. In other words, never simply crumble on price, always trade a price reduction for some concession from the customer e.g. a larger order or cash up-front
Discounts and price positioning
If discounts are required, use more creative discounting For example, replace flat rate discounts (e.g. “10% across the board”) with step discounts (e.g. “5% on the first £1000, 15% on sales above £1000”). Not only do they look more impressive and encourage people to buy more, but they often also work out cheaper.
Start off with proposing a higher price increase than planned so that the eventual price rise is less painful than your customers were expecting.
Try to reduce the prices of some items in your range at the same time as increasing the prices of most other items so that you soften the bad news with some good news, and make a point of dwelling on the latter.
You could also try increasing your minimum order size and introducing a surcharge for any orders below that threshold.
