5 Ways To Add Value And Charge A Higher Price
When you are competing for elbow room in a less developed market, you are often left with the price as the only way to fight it out with fierce competitors.
It becomes an endurance challenge whereby the company that can keep itself afloat for as long as possible, until the competitors fold, will eventually win. It’s not really a desirable market to play in if you have a choice.
These days, as more and more countries and territories are prospering nicely at a stable rate, the key competition factor is no longer about price.
Don’t get the wrong idea. Price is still an important element when consumers are choosing.
The difference now is that consumers have buying power. And they are willing to pay more for premium products that has value.
This is where the concept of value adding comes into the picture.
Have you wondered why organic spinach are so much more expensive than non-organic… yet people are queuing up at the supermarkets to buy them by the bucket loads?
It is because of added value.
In markets with high standard of living, consumers have more buying power, and thus, more choices in buying behavior. This makes them receptive to premium priced products and services if they think that they extra expense is worth it.
If you are competing in a market more affluent than average, your best move is to carve out a niche for yourself is to add value to your products and services.
1) Under promise, over deliver
This is psychology 101. You can observe it in everyday life… everyday.
And if you are married, you will implicitly understand how this means. The less your spouse expects of you, it becomes easier to please him/her. And the more expectations are demanded of you, the more often you become guilty of letting him/her down.
The only proven way to constantly exceed one’s expectations is to under-promise and over-deliver.
One of the biggest mistakes startups make is to promise the world to new customers. They are so desperate to acquire new clients that they often over promise what they can deliver. Reality then sets in, and they fail to fulfill their promises to their customers. Falling into a hole they dug themselves.
You can only blame yourself if you fall victim to that trap.
The silver lining is that consumers will often already have an idea of what to expect from something they buy. This can be due to experience, reviews, and simple anticipation.
So if you can go above and beyond the common stereotype of what people expect, you will achieve the over-deliver effect.
For example, if you run a simple e-commerce site selling physical products, shipping charges is something that customers will expect to pay. You can easily exceed their expectations by giving them a shipping cash rebate upon delivery of the products.
This will them in shock and awe. They have already paid for shipping and the last thing they’d expect is to get that expense back.
Granted. You can’t possibly eat up all the shipping charges yourself. But why not randomly select 10% of purchases and grant them rebates on delivery. You can deduct that expense from your marketing budget.
Too many businesses spend a fortune acquiring new customers while neglecting those who are already customers! You can be the exception to the norm.
2) Be unique
If you can manage business operations well, just conducting your business like how it has always been done should already allow to make a living for yourself.
However, if you truly want to generate a buzz around your business. Something that people talk about with friends. Something that gives customers a different experience compared to what they have been accustomed to…
You need to be different. You need to be unique.
This doesn’t mean that you need to use a wacky name for a cuber security firm, or start a fashion trend where businessmen wear pajamas into power meetings.
There are so many ways you can differentiate yourself from the competition as long as you commit to the method you have decided upon.
For example, you can simple by different by:
- Using a fun process of doing sales
- Designing packaging that pops
- Aligning your business with brand names
- Using a unique way clients can access your services
- and more…
When you make yourself different from the rest, you alter the perceived value of your products and services. Just remember that your goal is to fall on the positive end of changes in perceived value.
A bad marketing move could negatively impact your brand if you don’t understand your consumers and what they want.
3) Exceptional customer service
I’ve lost count of the number of times I’ve walked away from an interaction with new found respect of a brand or business. This is even if I still find their products crappy.
Customer service is expected by consumers from any business. However, exceptional customer service is not something that people generally expect thanks to the thousands of businesses that offer bad service.
This leaves a gap for you to focus on. It’s an opportunity that you can milk dry… if you dare.
Often times, you can easily exceed customers’ expectations on customer service by simply being available.
With the world of recorded robotic voices that play on autopilot these days when you dial a customer service number, callers will appreciate it when they can reach a real human being on the other end of the line to hear they issues and inquiries.
Even if their problems cannot be resolved, very often, just being there when attention is required can be perceived as exceptional customer service.
Ask yourself this simple question. On calling a friend or a hotline, is it more frustrating to hear someone say “No” or not being able to reach anyone at all? Most people find the latter as a more frustrating experience.
Good customer service is of course, not limited to the telephone.
Customers’ experience with you can be greatly improved by:
- Being available to attend to them
- Actively follow-up with emails, SMS, or calls to inform them of status
- Contact them when issues are resolved to learn what more they need
Amazingly this 3-step process if enough for a prospect or a client to have a happy experience with a business to tell their friends ad colleagues about. The more amazing thing is that not a lot of companies make it a point to practice them!
4) Better terms and policies
When the internet started selling physical products, the public had a lot of reservations on how well it would turn out. Well… we don’t need to be reminded how that turned out.
One of the major factors that totally transformed people’s fear of buying online is the 100% money back guarantees offered by retailers. This made purchases risk-free and eliminated most, if not all, of the security concerns buyers have online.
Online retailers and marketplaces which started that trend must have made off with a pretty huge pile of revenue as they took the plunge before the “money back guarantee” idea went main stream to the masses.
Every product in every market have consumers who are not fully satisfied with their regular service providers. There will always be gaps that are not patched up by businesses due to laziness or shortsightedness.
For example in the past, the mortgage market had long had to deal with unhappy customer who were not able to get a loan for their houses due to income and credit factors. How can they meet mortgage payments when they can’t even make the rent?
Then someone came up with the crazy idea of “no income, no down payment” mortgages. The market exploded almost immediately. The outcome of this example is not really something to boast about. But you get idea.
5) Build relationships
The easiest people to sell to are those who have already bought from you. Stop seeing your customers are one-off transactions. A loyal customer can very well continue to buy from you forever.
The question is “how do you build relationships and loyalty?”
This is not as difficult as most people think. It’s not as if you are preparing yourself to get married. There is no need to say sweet nothings or cuddle your customers to sleep.
Keeping them informed and in the loop can do wonders of how they think about your company. Supplement that with occasional members-only sales events and you can potentially lock-in that loyalty for life.
Follow these simple steps to build relationships with your customers.
- Collect email, mailing address, or contact number on a sale and ensure that they agree to receive your notices
- Send your mailing list a newsletter once a month to inform them of promotions and coupons
- Arrange a members-only sales event annually or within a time frame you are comfortable with
- Rinse and repeat
Customers can feel connected and part of a community when you send consistently send out newsletters and glossy brochures to them. This builds relationships and brand loyalty, especially when they get involved.
Even though managing followup campaigns might eat into your marketing budget, it will be worthwhile in the long run. And you probably don’t have to wait very to see the results.
With these 5 basic ways to add value to your business, you no longer have the excuse of not being able to compete with competitors whose only competing factor is often one of price.