What would you think if I told you that you might sell less of something if you set the price too low? I know, a lot of you will think that I am crazy, but honestly, it is true. I am talking about the concept of perceived value. What does that mean? Well, basically it means that if you set the price very low, people will perceive the item as poor, low value, etc.
One of the businesses that I am in is selling and delivering flowers in the Philippines. I sell a lot of flowers too, you can bet on that! Now, let’s think about something. Let’s say that you have a girlfriend here in the Philippines, and you are deeply in love with her. You plan to propose marriage to her. First, though, you want to send her some very special flowers to set the scene. OK, so when you come to my website and you see that I have two different bouquets of roses. The first bouquet is $2.99. The second one is $49.99. Which one are you going to buy? Well, if you care deeply for this girl, I have no doubt in my mind that you will be buying the $49.99 bouquet because in my mind you are thinking that anything that is $2.99 can’t be very special.
The same thing holds true for almost any product that you can think of. How about if I wrote an e-book about how to earn money online? If I had it for 99 cents, I wouldn’t sell many, because people would perceive that it had little information of much value in it. If I sold it for $99, a lot more people would be interested.
What does this all come down to? Well, it comes down to a video that was posted last week by a Video Blogger that I enjoy following. His name is Jim Kukral, and he is a marketing expert, particularly for online items. Give his video a look:
Now, what do you think? Do you price yourself too low? I think that the tendency for most people is to set their price way too low, practically giving the stuff away. If you set the price high, you can offer yourself another marketing capability – the ability to give a discount. If you tell somebody that the book is $99 (true), you could say that you are willing to give them a discount and offer it to them for only $79. They feel good, you make a nice amount of money – everybody is happy!
Push your price points up, and see if it doesn’t result in higher sales! I bet it will!