Sales Growth: How to earn a price premium
Frequently sales revenue is said to be low because competition undercuts. This is always a fallacy. The reason sales are low is because the competition was better at meeting the client’s requirements. Do I hear yells of rebuttal? Here’s a story to explain.
On the weekend I went to get 3 pieces of jewellery repaired. I am pleased to say it was successful, and I happily paid a premium of 30%. In the process I was reminded how easy it is to win a premium price for products and services (and to lose same).
These jewellery pieces are important to me. The memories and sensual touch give me pleasure. The store that got my custom understood that I am a buyer with emotional needs as well as technical needs – like every human being.
In the first store the artisan provided a quote for two pieces then explained how the third could be cheaply fixed, subsequently qualifying his statements with “but this would not last long”. When I asked for a solution that would last, the artisan was flummoxed. He only new how to do cheap and had not thought of other possibilities. That is fine, I am not his clientele and so left.
Store two was a different experience. I was told they may not do my work as they guarantee a perfect outcome. This means repairs are limited to their own pieces, or to pieces where the problems are very simple. So when the third piece was handed back unquoted the effect was to increase my desire to have my other pieces repaired by them, as this simple act showed they truly wanted to provide quality. They also cared enough to recommend another service provider who will repair piece 3. The result? Store two understood my needs and fears and earned my trust, and a 30% premium was happily paid.
Achieving a premium price is straight forward
(1) Choose the emotions and then sell to the person who has them
The first thing to remember is that every buyer, whether buying B2C (as in my case), or B2B is firstly a person with emotional needs, and secondly has technical objectives. Not the other way around. Be clear about the emotional needs you want to meet, and then select your customers and clients on this basis.
(2) Align your operations
Ensure all operations are directed at fulfilling the wants and needs of that particular customer profile and at a level better than any competition can do so.
(3) Be ruthless
About the service that will and won’t be provided and who will and won’t be sold to. Don’t deviate even once.
(4) Be brave and steadfast
It takes guts to turn business away but this must be done if you desire a business that can constantly sell at a premium. Many people will fall outside your positioning and at times you’ll hesitate to send them away. Waver once and the slippery slide to being unremarkable commences, where the customer sees value as ‘lowest price’ and competition is bloody. Be strong and in time a profitable business will grow – one that will be stand apart from the competition, and you and your team will love.
(5) Be proud
Every time you hear competition ‘winning’ on price yell out:
“Yeh! That customer sees value in a low price. That competitor plays in a patch different to us. We can forget about them both now. Lets get back to earning the right to the 30% premium our work deserves”.
Jennifer is a business and executive coach who helps leaders turn their strategies into remarkable results.
She assists executives and business owners to achieve goals such as improved profit, productivity, leadership skills, business value. Her services are Business and Executive Coaching, Group Facilitation and advising on Board Governance. Her straight forward process help leaders achieve results without delay.
To find out how she can help you, call +61 439 520 182 or email.