Justifying Higher Prices · Max Business School™

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Justifying Higher Prices

Don't be put off when a potential customer tells you that your product or service is too expensive. The truth is that most of your customers could afford to pay. It's just that they are hoping to find a better deal somewhere else, or possibly, one which may offer them more value for their dollar.

Although your first instinct might be to lower your price to try to close the deal, you have a range of alternatives to overcome their resistance and still make a reasonable amount of profit.

One option is to enhance the offer with additional services. Examine your promotion carefully. Look for ways that you can increase the apparent worth of the offer. Are there extras like technical support, installation, follow-up, or accessories that you can provide that will let the customer believe they are getting a better deal?

From your experience, you know that you can expect to pay more when you deal with a specialist. The department stores and big box outlets are normal venues when you just want to purchase a generic product. For a more important purchase, you will be ready to pay a little more and contact someone who knows what they're talking about. When promoting your product or service, it is good business sense to find a way to establish yourself as a specialist who demands respect. That is the sensible way to justify slightly higher prices.

Another option is to find which niches within your market you can focus on. A little research in your chosen market allows you to discover groups within your market that are particularly appropriate for your selected areas of expertise and merchandise.

Take the time to follow through, do a little market testing and figure out exactly how your product or service relates to the special needs of these niche groups.

Present yourself to them as someone who has the required expertise. Update your sales materials to highlight the specific needs of each group. Your marketing plan is to let these groups know that you are the supplier that really understands what they want and need, and will be the best qualified to make the right recommendations. Then you can see your profits skyrocket.

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