Over the years, I’ve sold a variety of products and services. But when it comes to pricing strategies, this question always came up: how much should I charge? This was a crucial question when starting a new business, and the temptation was to set the lowest price possible to attract new customers.
However, as time passed, I realized that this strategy didn’t always work out best. Think about those moments when you’re in a grocery store checkout line, debating whether to grab another pack of gum or some $0.99 earbuds.
On the flip side, think about the times you’ve seen something you really wanted, and price hardly mattered because it perfectly met your needs and interests. That’s why in pricing strategies, “Meeting Needs & Interests,” is more important than simply focusing on price.
Introduction to Pricing strategies
Although I covered a bit of this in Niche vs. Results, I want to dive in a bit deeper to hammer this point home.
It’s a common belief among consumers that price is one of, if not the most important factor when making a purchase. We comparison shop to find the lowest price, wait for sales, and even haggle to get the best deal possible. The assumption is that a lower price equals better value.
Now, even though you can read a ton of articles on ‘pricing strategy’, I just want to make this really simple for you.
Price Is Secondary
However, while price certainly plays a role, it isn’t everything. In fact, when you really understand your ideal customer and deliver exactly what meets their needs and interests, price becomes secondary.
The truth is that customers don’t make purchase decisions based on price alone. They buy when the complete offer - including products, services, and messaging - aligns with and fulfills their personal goals and desires. That’s you key motivation in creating your own pricing strategies. By focusing more on truly delivering what your best customers want, price becomes just one minor factor among many, not the sole determining criteria.
Understand your ideal customer
The first step to making price less important is fully understanding your ideal customers - their problems, motivations, and needs. Don’t think of them as a monolith, but develop concrete profiles of your most valuable customer segments.
Conduct in-depth market research through surveys, interviews, and focus groups. Ask about their goals, frustrations, typical day, and challenges they face. Also learn about their interests, values, and preferences.
Look For Patterns & Keep Learning
Another key in creating your own pricing strategies. Is to look for patterns to help create fictional representative personas. Give them names, photos, backgrounds, and detailed attributes. Fully flesh out what makes them tick.
This level of insight will allow you to tailor every part of your business to your ideal customers’ wants and needs. When you resonate with them in this deep way, price becomes less relevant. They will pay more for a solution that truly fits their lives.
Keep learning about your customers over time. Continually gather feedback and observe how they use your products. Refine your personas periodically to keep them accurate as needs shift. The goal is complete understanding of your ideal buyers and the pricing strategies they will best respond to.
Create an irresistible offer
Armed with deep knowledge of your ideal customers, you can now craft an offer that aligns perfectly with their needs. Develop products and services that solve their problems and help achieve their goals.
Deliver Extreme Value
Rather than competing on price, focus on delivering extreme value. Provide features and benefits that your customers truly care about. Go above and beyond expectations with quality, customization, and white glove service.
Example: Bathroom Fixtures Company
For example, a bathroom fixtures company could offer high-end smart faucets with voice control and automatic sanitization. They provide in-home design consultations and installation. While priced higher than competitors, these services create an amazing experience for time-strapped, germ-conscious customers.
Messaging
Messaging should clearly reflect what makes your offer irresistible for your target customers. When creating your own pricing strategies, don’t rely on generic claims like “best quality” or “lowest price.” Speak directly to their pain points and desires.
Personalize
Email sequences, sales conversations, and ads should all be personalized to customer interests. A home chef might see messages about specialized cooking features, while busy parents are shown how the product saves time.
When you nail the trifecta of value-packed products, white-glove service, and tailored messaging, ideal customers will happily pay your premium prices. They’ll see you as the obvious choice and that’s a winning combination for your pricing strategies.
Price accordingly
With a top-notch offer in place, you can price based on the value you deliver rather than arbitrary factors like competitor pricing. Customers will validate that your prices make sense in light of the benefits received.
Avoid Lower Pricing
Avoid the temptation to set lower prices than competitors. Not only does this eat into profits, but low prices can actually reduce perceived value in customers’ minds.
Higher prices typically signal higher quality. For example, a $500 bottle of wine is considered superior to a $10 bottle. Of course, the wine still needs to deliver on that promise. But intelligent pricing builds brand equity.
Keep this in mind when creating your own pricing strategies. Instead of reducing prices, offer payment plans and financing options to improve affordability. Breaking payments into installments or spreading out over time reduces friction without diminishing value.
Sales & Discounts
Occasional sales and discounts are fine too. Just avoid conditioning customers to only buy at lower price points. Use promos sparingly to introduce new customers or liquidate slow-moving inventory.
Smart pricing reflects the outstanding value you provide. Combined with financing flexibility, you can charge profitable prices that also feel fair to delighted customers.
Of course, you still need intelligent pricing strategies and financing options to reduce friction. But the key is to exceed customer expectations consistently. Price brackets matter less when their needs are not just met but exceeded.
Case studies
The best way to demonstrate that meeting needs trumps low prices is through real-world examples. Share success stories of customers who gladly paid your pricing because their needs were perfectly met.
Example: Virtual Assistant Package
For example, profile a busy professional who purchased a premium virtual assistant subscription. Show how the VA saves them 20 hours per week on administrative tasks. The customer is thrilled to recover their personal time and says the high monthly fee is 100% worth it.
Collect Feedback & Testimonials
Interview satisfied customers and collect testimonials focused on the value they received. Ask how your product or service solved their problems or achieved desired outcomes. Publish excerpts centering their needs being fulfilled, not the price paid.
Case studies build trust that your higher pricing is justified by the results achieved. Prospects connect with other real customers who happily paid your fees. This social proof overrides concerns about price tags.
When readers see themselves in these examples of ideal customers raving about your value, price becomes less of an obstacle. They’ll pay your prices if you deliver the same outstanding experience.
Conclusion
In summary, price becomes secondary when you place your ideal customers at the heart of your business.
By deeply understanding your target audience and their needs, you can create tailored offers that perfectly fit their lives. Backed by stellar service and messaging that speaks to their goals and interests directly, customers will validate paying your higher prices.
With the right product-market fit, buyers will flock to you over lower-priced competitors. When you resonate so completely with who they are and what they want to achieve, your prices align with the value being exchanged.
By focusing on value, not bargains, you earn trust that your prices are fair. Deliver an exceptional, tailored experience, and ideal customers will gladly pay for the privilege of achieving their dreams through your business. Needs trump prices. It’s the easy path to your own perfect pricing strategies.