The price you put on a product or service is largely inconsequential. The real deal is the perception of the customers on the specific amount. This is where the social science of pricing moves into physics.
Yes, two salespeople can introduce the same product to the same customers, and each of the customers will come out with different perceptions of the product price.
In other words, the best Pricing Power is creating perception which will move the customers, without necessarily adjusting the actual price of the product. Yes, how do you make a product seem “cheap” by not actually reducing the actual price but through perception? But note: it goes beyond being “cheap” to affordability since something could be cheap and still not affordable.
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I explained perception in this Harvard Business Review article, using the iPhone as a case study. . Communicate at a higher level and reduce the “spending inertia” so that customers will open their wallets. Of course, your mastered Newton’s laws in junior secondary to understand that “energy” is needed to overcome the state of matter, and that means you need a little “energy” to close that sale. Moving from “Not Sure” to “Paid” becomes how market share is won.
Join me at Tekedia Mini-MBA as I teach the physics of product pricing. You must price smartly!
Sat, Aug 23 | 7pm-8.30pm WAT | Physics of Product Pricing and Optimizing Profitability – Ndubuisi Ekekwe | Zoom link in class board
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