When the market is down and everyone is worried about spending money – suddenly everything is about the price. Because the economy is slow and there is more competition for similar products the first thought that people think of is how much can I reduce this product for and still make a profit.
But wait lets stop and examine the logic here!
Has the value of the widget or our product changed, No. But we are concerned that the perception we get from the client has.
Basically people buy things for three reasons. They “need” them regularly, like food. We all go to the supermarket still. Or we buy things because we “want” something, the latest phone, or plasma screen, or car? Thirdly we are “sold” a product by sales-people.
So going back to our value principle what can we do to change the customers perceived idea of the value of what we are selling.
Instead of reducing the price of our product – why not increase the Value of the product. If we are reacting to people because we think they only care about cost, we are missing a very big opportunity to show the client that the value of our product is greater than the competitions and therefore we can justify being slightly higher priced.
By increasing the quality and even the quantity of the product, the customer feels that they are getting a better deal from you (getting more stuff for their money) than from another vender who has reduced just his price.
A vender reducing the price in the down time now has to increase the price for the same widget when the economy changes. You maintained the status quo. Your prices didn’t change but your perceived value did.
As an example; recently we were working on a project for a client and followed the logic above. In adding perceived value we offered to actually do more for the client – providing greater service but for the same cost.
Leave a comment below………
Filed under: marketing