The amount of money and profit you generate from a product or service is always going to be linked directly to the price. Your profit, as you know, is going to be a sum of the price your charging and the cost to produce. So how can you increase your profits and justify a higher price with a higher value. There are a number of tricks to doing this, and most of them come at a surprisingly low cost. Let’s look at a few:
1. Buy One Get Some
By Janine from Mililani, Hawaii, United States (free sample Uploaded by Fæ) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
This should not necessarily be confused with the concept of creating a “buy one get one free” deal but rather adds a little something to what your customers are paying not necessarily to justify the price but show them you’re serious about providing them with value. This could include attaching samples or products that related to the one you’re selling. For example, if you’re selling a natural sleep aid you might include a sample for another herbal supplement your customer might be interested. Samples not only add value to your product but they also provide the possibility of expanding your customer’s horizons and involvement in your company by introducing them to another product they may be interest.
This could also include a product that relates the one you’re selling, but of somewhat lesser value. If you’re selling say, a vacuum cleaner consider adding a free attachment, or extra vacuum bags (if applicable) or perhaps a warranty that will assist with maintenance issues. Your customer will be more likely to feel less of the sting from the price paid when something a little extra is included for their trouble.
2. Improve Packaging
Improving packaging is a great low cost way to jack up the value of your product. Most likely your customers don’t want to receive what they’re getting mailed to them in a small ziploc bag. Professional packaging will show you’re serious about your business and customers will be more likely to pay high when something looks as high quality as it actually is. In some cases being able to order custom designed packaging will also be lower cost as it’s available in bulk. Packaging should be sealed air tight when possible and come fitted fully with a professional design that’s easy on the eyes.
3. Raise The Price
While this tends to go counter logic, believe it or not pricing strategy plays a major role in making a sale as well as influencing the perceived value of your product. This goes for everything from food and drink to digital downloads (like Ebooks). Different pricing strategies tend to work differently for different companies. Take for example Walmart and Macy’s, two very different pricing strategies. One offers lower prices and everyday goods while one offers high prices on high end goods, the prices of which only strengthen the perception of said goods as in fact, “high end”. Both are successful companies though their models are different. In that sense then a customer is often more likely to feel like they’re getting more for their money simply because it’s priced that way. When they see a price too low they feel like this must be a “catch” and the undercut is a result of quality or desperation to make a sale. So as you can see in some cases increasing the value of your product can be as simple as raising the price.