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Are You Creating Value for Your Price?

 

I just had a great lesson in pricing psychology that I thought worth sharing. 

I went into Sleep Train in Fairfield, CA to buy a new mattress. I told them up front, I’m on a budget. I had in mind how much I wanted to spend and headed over to the bargain mattress corner. 

The sales guy showed me several options within my price range.  I found one that had the quality I was looking for but it was a couple hundred dollars over what I wamarketing strategy small business nted to pay. I headed over to the cheap mattress section and even considered waiting. 

Sales guys hate to hear “maybe I’ll just wait”. 

“Let me check to see if we have that on clearance . We may be able to get that mattress for a few hundred less – would that be more within your budget?” – Well yeah!! 

So he walked away, plugged away at the computer for a few minutes and said, “No, none of those on clearance. But see the one 3 beds over – what do you think of that one? “ I glanced at the price tag as I bounced on the nice firm mattress –  more than double what I wanted to pay. But I laid down on it anyway – and I fell in love! 

Budget? What budget?

“I have that one for half off,” which still made it about $200 over my budget. However, suddenly and without warning, my budget flew out of my brain…  All I heard was”FIFTY PERCENT OFF” this beautiful bed.  A bed that was way out of my price range could be mine!!!  WHAT A DEAL!!  And before I knew it the words, “I’ll take it!” few out of my mouth and within minutes I walked out of Sleep Train, the proud owner of a brand new more-expensive-than-I-could-afford bed! I was happy!   

As I drove home it dawned on me – the sales guy was an absolute genius! The first bed at full price – the one I would have walked away without – was the SAME price as the second bed at 50% off.  He got me to spend more than I had budgeted by changing the perceived value of the product.  He got me spend more than I wanted– AND made me feel like I got a phenomenal deal in the process!  Brilliant.

As a small business owner I wondered, am I doing this effectively in my own business?  Am I making prospects and customers feel like they are getting great value for their money? I help other small business owners do this all day long – but have I really created a Sleep Train-like experience for my own clients?  And my mind started instantly thinking about how I might re-package and reprice some of my offerings to create even more perceived value to leave my customers feeling the way I felt as I walked out of that store.

We don’t buy on price!

I’ll say it again – we do NOT buy on price, we buy on perceived value. 

Part of an effective marketing system is developing a pricing and packaging strategy that gives you the profit margins you deserve AND makes your customers feel that they got great value for their dollar at the same time. Not an easy thing to accomplish. What pricing strategies do you use to achieve this?

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