Customers compare prices all the time. It is difficult to convince a customer to buy your expensive widget over your competitors’ if they believe that the two products are the exact same thing. Yet, a lot of businesses do this successfully. So how do you make your customers find your product pricing reasonable despite the higher price tag? Here are a few tips.
Introduce Intangible Benefits
One of the most attractive ways to make higher price more affordable is by introducing benefits that are hard to quantify. For instance, if you are selling gym memberships, you could offer “Unlimited free diet advice” as part of the deal and use your existing training staff to cater to diet advice requests. It is difficult to quantify unlimited and thus helps raise the value of the product being sold quite significantly. Some businesses have been successful by introducing a notional price for such free add-ons. For the same example above, gyms could send a free PDF document on every purchase which can be promoted as a “digital health kit valued at $80”. An $80 value product offered for free with a $40 membership sure sounds like a steal and this helps raise the notional value of the item being purchased.
Introduce Wallet-Friendly Subscription Plans
A software license that costs $1000 a year sounds quite expensive. Recently, SaaS providers have substituted such license-pricing with monthly subscriptions that are more wallet-friendly. It is easier to sell a plan that costs $80 a month than sell one that costs $1000 a year. Such strategies work on product offerings as much as it does for services. A number of online and offline retailers too make use of installment based payment options to make their products more affordable. Businesses that have started offering such installment plans for their products report not only higher conversions, but also better customer experience and loyalty.
Emphasize On Savings
Some products, while expensive, can also bring about a terrific amount of savings to the customers. One critical aspect of marketing is to highlight these benefits and savings to the customer. This can be done by educating the customer on the alternatives in the market and elaborate on the actual savings. For instance, if you are using Paypal for international payments, their fee for transactions and currency conversion may seem like a lot. But compare it with bank transfers and the fees suddenly seem reasonable. Businesses may offer cost savings calculator on their product pages to help customers understand how much they save by investing in this product.
Offer A Perspective Of The Cost
Ever noticed how ebooks are often sold “for less than the price of coffee”? Customers buying a physical book tend to understand the value of the product they are holding better than those who choose to download the same book in digital format. So while $10 for a hardcover sounds quite reasonable, customers may have trouble paying $4 for the same book in digital format. But by comparing the price of the ebook to a regular, everyday purchase like coffee, ebook sellers make the value of $4 appear lower than it really is. This, in turn, makes it easier for customers to shell out their money for a digital document that they may have otherwise not paid for.