Adding Value Customers are Willing to Pay For

Adding Value Customers are Willing to Pay For

A lot of consideration goes into the pricing of your offerings; finding the ideal pricing strategy is imperative to achieve a satisfactory balance between profit for you and a sense of value for your customers. Pricing can seem like a double-edged sword, however. Traditional logic says if you charge a higher price than competitors, some customers will consider you "overpriced." On the other hand, charging a lower price will entice many shoppers because cost considerations are often paramount in the minds of consumers.

I'd like to challenge that traditional logic though. I think there's a case to be made for charging more for your product or service - and that the practice could actually be something customers are willing to abide by - considering you provide value beyond the actual offering itself. Let's look at some of those "intangibles" and how they can affect the desirability of your product over a lower priced one.

Convenience - How easily can a customer purchase from you? Many consumers value their time and the ease of the buying experience over securing the lowest price. Do all you can to provide a streamlined, seamless experience, free of distraction, confusion, technical glitches, unnecessary steps or "hoops" to jump through and yours could be the more attractive company with whom to spend their money.

Availability/delivery time - It's common for customers to be put off by a company advertising a low price for something that's unavailable or out of stock. Likewise, the prospect of waiting an interminable amount of time for delivery of an item is distasteful. Customers are often willing to pay a higher price to a company from whom they can take receipt in a reasonable amount of time.

Flexibility/customization/personalized service - When a company is able to go above and beyond a "one size fits all" approach to their offerings, customers are more willing to pay a premium. While standardization and packaging are important to the efficiency and uniformity of quality for a company, the ability to pivot, bend or shift to meet customers' individual needs or wants has great value that customers appreciate.

Customer service - The value of competent, responsive and thorough customer service cannot be overstated. Customer care agents who are empowered to ensure customers are well-served, highly satisfied and made to feel important instantly make paying more a no-brainer.

Delivery/installation - Not only is it important that delivery and installation are available and not prohibitively priced; the party doing the delivery/installation matters. Delivery and installation is an extension of customer care. Should something go awry, it's best if the company's own employees are on site rather than independently contracted delivery people. Employees have the ability to make decisions and communicate directly with sales to clear up any issues that may occur. They may also have specific knowledge of the products sold by their employer. In-house delivery may be more costly, but there is intrinsic value to it.

Warranty/satisfaction guarantee/return policy - Such assurances as these help customers feel confident that they have chosen wisely. Rather than feel like their purchase is absolutely final and they have no recourse through the seller should they experience an issue, standing behind your offerings removes purchasing hesitation. They are likely to pay a higher price to you rather than do business with a lower-priced competitor who may come off as "fly-by-night" by not offering such satisfaction assurances.

Company values - When your company has a mission bigger than its bottom line and "walks the walk" with initiatives and donations to causes, you'll garner goodwill among customers; often they are willing to support your business in its charitable mandate, even if it means paying more for the product or service.

Overall shopping experience - This factor proves a bit more enigmatic but the fact is, customers get a vibe from every part of the sales process - from your location, display, website, branding, messaging/marketing, packaging, employee empowerment and attitude, company policies and mission, and ethical practices. All those elements are conveyed to a potential buyer and collectively make or break their impression of you. In general, the higher their estimation of your overall value as a company, the more they can justify paying a higher price for the privilege of doing business with you.

There's so much more to appropriate pricing for your offerings than just taking your costs and profit margin into consideration. Remember these types of value-adds that make an impression customers consider worth paying for.

How could you raise the perceived value of your offerings so customers would pay more?