With the recession, it’s tempting to lower prices or offer discounts in order to attract sales. The trouble, as the car companies have found, is that they’re not adding any value to their products. The cars, the story the companies are telling, and the service haven’t changed.
There may be a recession, but people will pay for things that they perceive to be worth the extra money. Astronomy buffs will pay up to $100,00 for a telescope. Businesses will pay FedEx $15 to deliver a letter, when the post office would do it for 44 cents.
The reason is value. FedEx offers additional services, such as guaranteed delivery, end to end tracking, and overnight service. The extra value translates into extra dollars that their customers willingly pay.
Some ways to add value:
- Bundle products or services together. If a muffin is $2.00, add the coffee for 50 cents more.
- Add extra services (overnight delivery, tracking) that the competition doesn’t offer.
- Offer a free extra with a minimum purchase (like Amazon does – this gets me every time, as I frantically look for something to buy to meet the $25 free shipping threshold). I want that free shipping, even though I sometimes end up spending more money to get it.
- Present your fees in comparison to the money your client will save. Find out how much your client is losing in downtime, lost productivity, or stress. If the problem costs $100,000 a year, $10,000 to fix it saves her $90,000 annually or $450,000 over 5 years.
- Break the cost down into a smaller piece: less than the price of a hamburger.
- Compare the single initial outlay to the cost of multiple replacements. Many years ago, I paid $595 for a Burberry raincoat. I’d been buying cheap $85 raincoats every year for three years, and got fed up. I swallowed hard paying for that coat, but I still have it (in perfect condition, and they’ll replace worn buckles for free). Buying new cheap raincoats would have cost me a total of $1,955. That expensive coat saved me $1,360.
What are you doing to increase your value? Share your stories and tips.
