It took me awhile to come to terms with the fact that many people are
willing to pay what you and I probably consider to be outrageous sums
of money for a product or service when they want the premium or very
best you can offer. EVERY ONE has things they'll ‘splurge' on. Have you
overcome that price barrier mentally? Whether or not you are comfortable
with this issue, it's a fact of life, so you can either offer premium
versions and make higher profit, or you can dismiss it and do things the
way you've always done them! Here are some examples of items I recently
spotted that prove that demand exists for high priced, premium
products:
William Rast Jeans - $220
Small bottle of water at Celine Dion concert $5
Apple iPhone - $600
Vacheron Constantin Swiss Watch - $1.5million
Leather bound Trivial Pursuit, Special Edition-$4400
Kopi Luwak Coffee - $600 / pound or $50 / cup
Obviously when you consider the actual price of manufacturing these products, there's no relation to the price being charged. Don't get me wrong, I'm not in support of price gouging in any circumstances, but if you offer something special and the customer is happy to pay the premium, why not give ‘em what they want! It's really about supply and demand, and the feeling of exclusivity that many customers want. For example, a hotel in a sleepy town might go for $45 a night, whereas a NYC hotel room will commonly cost you $300 a night. The rooms could be identical, but because of other factors the variation in price is huge. It's understood that you pay for location.
So, is there a premium version of what you sell? If not, can you create one? Approximately 20% of customers are known to opt for the very best you can offer, regardless of price.
William Rast Jeans - $220
Small bottle of water at Celine Dion concert $5
Apple iPhone - $600
Vacheron Constantin Swiss Watch - $1.5million
Leather bound Trivial Pursuit, Special Edition-$4400
Kopi Luwak Coffee - $600 / pound or $50 / cup
Obviously when you consider the actual price of manufacturing these products, there's no relation to the price being charged. Don't get me wrong, I'm not in support of price gouging in any circumstances, but if you offer something special and the customer is happy to pay the premium, why not give ‘em what they want! It's really about supply and demand, and the feeling of exclusivity that many customers want. For example, a hotel in a sleepy town might go for $45 a night, whereas a NYC hotel room will commonly cost you $300 a night. The rooms could be identical, but because of other factors the variation in price is huge. It's understood that you pay for location.
So, is there a premium version of what you sell? If not, can you create one? Approximately 20% of customers are known to opt for the very best you can offer, regardless of price.
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