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Warning: This is a counterintuitive concept, but it’s backed by psychology and proven results, so don’t just dismiss it as nonsense.
Mei Pak makes and sells necklaces in the shape of snow cones on Etsy.
Just to build a little foundation, let’s talk about what most marketers do when they want to sell more of their product: They lower their prices. The problem with this is two-fold:
1: Competitors will then lower their price to stay competitive, and now you have a race to the bottom. Ouch.
2: It still takes you the same time to do things like create a product, perform customer service and so forth. Thus, you are now being paid less for your time, not more.
Here’s what you might not realize – many (most?) shoppers are not doing comparison pricing, especially for lower cost items. They see something they want, and they buy it.
And if your product is in a category of its own, then your customers cannot price shop because there is no one doing exactly what you offer.
If you’re offering a necklace for sale that looks just like the necklace 2 or 20 other sellers are offering, you have a commodity. Commodity selling is nearly always a race to see who can charge the least, and that’s bad.
But if, like Mei, you are creating a product that is unique, then you have no competition and you can charge more.
Also keep in mind that many sellers undervalue their product or service. Most customers care about the outcome of what a product is or does. Is it unique? High quality? Beautiful? Does it make them feel good? Does it solve their problem quickly? They don’t care so much about what goes into the product or how it’s made but rather what the product does for them.
Okay, you know where we’re headed, right?
Mei raised her prices and doubled her sales. But she didn’t raise her prices just once. Here’s what happened:
Mei conducted a pricing experiment on her best-selling product, a handmade scented snow cone necklace. Originally, she had it priced at $28.00, and she sold so many of them that she had a difficult time keeping up with the orders.
Her first test was to sell it at $35 instead of $28. Result? The increase in price didn’t hurt sales. In fact, MORE people bought at the higher price.
Next, she tested $40, and again, more people puchased at the higher price.
But she wasn’t done yet.
She tested $45 and yes, sales went up again, making her more money and profit.
Finally, she tested at $50, and sales dropped.
Mei figured that $45 must be the sweet spot.
But after a few weeks, she had a thought: There was room between $45 and $50 to do another test.
Can you guess what price she tested?
$49.99.
Lo and behold, the $49.99 price WON. At this price, which was almost double her original price, she’s getting MORE people viewing the product listing, more sales and more revenue.
And the best thing was, she didn’t have to change anything else about the product.
Do you have any idea why this worked? I suspect it’s because $49.99 sounds like a much higher quality item than $28.
If you can do this in your own business, you will only need half the traffic to make the same amount of money, or the same traffic to essentially double your revenue.
Tips to successfully boost sales by pricing higher
Here are some tips to sell more by raising prices:
- Elevate Your Presentation:
- Professional Photos: Ditch those blurry, amateur snapshots. Invest in high-quality product photos that showcase your offerings in the best possible light. Make your products look irresistible.
- Compelling Copy: Words matter. Craft compelling product descriptions that highlight the unique features and benefits of your offerings. Tell a story, evoke emotions, and make people desire what you’re selling.
- Premium Packaging: First impressions matter. Upgrade your packaging to create a sense of luxury and exclusivity. Think elegant boxes, tissue paper, handwritten notes—you get the idea.
- Reposition Your Brand:
- Highlight Value: Emphasize the value your products or services provide. Focus on the problems they solve, the benefits they offer, and the transformation they can bring to your customers’ lives.
- Create a Premium Brand Story: Develop a compelling brand story that positions your offerings as high-quality and desirable. Share your passion, your unique selling proposition, and the reasons why your products are worth the investment.
- Target a New Audience: A higher price point might attract a more affluent or discerning clientele. Adjust your marketing efforts to target this new audience and tailor your messaging to their specific needs and desires.
- Play with Pricing Psychology:
- Charm Pricing: Ending your prices in .99 or .95 can make them seem more appealing. It’s a classic trick, but it works.
- Anchoring: Introduce a higher-priced option to make your other offerings seem more affordable in comparison. It’s like that expensive bottle of wine on the menu that makes the rest seem like a bargain.
- Bundling: Offer packages or bundles of products or services at a discounted price. This encourages customers to buy more and perceive greater value.
- Focus on Customer Experience:
- Exceptional Service: Provide top-notch customer service that makes people feel valued and appreciated. A positive experience can justify a higher price point and foster customer loyalty.
- Exclusive Perks: Offer exclusive perks or benefits to your customers, such as free shipping, personalized recommendations, or early access to new products.
- Build a Community: Create a sense of community around your brand. This fosters loyalty and encourages customers to feel invested in your products and services.
What You Need to Know:
- Raising prices isn’t a magic bullet. It needs to be supported by a strong brand, high-quality offerings, and exceptional customer experience.
- Don’t underestimate the power of perception. How you present your products and services can significantly influence how people perceive their value.
- Monitor your results and adjust your strategy as needed. Pay attention to customer feedback and sales data to ensure your pricing strategy is effective.
By implementing these strategies, you can confidently raise your prices while increasing sales and building a stronger, more profitable brand.