Winning Tactic #5 - Charging the Right Price and Backing It Up

It is rare that people charge the "right" price for their product or service. Most businesses look at what the competition is charging. From there they tend to look at where they want to be "price positioned"-low, middle or high end in comparison. They assume their competitors have it right. But that's wrong. Remember, people don't buy on price alone. People buy based on perceived value.

  • Understand value is very different than price. It's human nature to place a higher value on something when it is more expensive. In general, many people assume that because something is more expensive it is somehow better. Take a simple thing like grocery shopping; say there are two local markets to choose from near you. One is known for having the lowest prices, amazing sales and overall big savings. The other nearby market is known to be much more expensive. Seldom do they have big sales, and you know when you shop there it will cost you much more. For most people, even before they visit either market several assumptions will be made. The less expensive market will probably have older, less fresh produce; they'll probably have a narrower variety of goods; and the cheaper market will probably be less clean. The more expensive market on the other hand will be assumed to have fresher produce, a wider variety and a cleaner environment; perhaps they'll even be assumed to be more "gourmet" simply by being more expensive. These assumptions may or may not be true. That's not the important point here. The point is, people make assumptions about value based on price.
  • Avoid pricing your products or services too low and falling into the category where many will assume your product or service may not hold enough value.
  • Equally important, avoid pricing that is too high lest you fail to satisfy your client's expectations. If you decide you are going to position yourself among the high end in the massage parlor industry, understand the expectations will be much higher than if you were to be offering low to mid level pricing. If you can't deliver at that level, don't position yourself there.
  • Let the customers decide the right price. Your goal is to maximize the profit you make from the customer over the lifetime of the buying relationship. One way you can decide on the right price is to do a test. Offer different prices to different customers. Select three groups of 20 or so customers and offer each group different pricing, low, middle and high end. You can then evaluate the results and see which group has the higher profit. Don't assume the high end pricing group will have the highest profit margin because there may be far fewer sales in that group compared to the other groups. More sales and more customers also translate into profits.
  • Add value to your price. Whichever price position you fall into, it's important to add value to that price. There are many ways that this can be done. You can add a guarantee (Winning Tactic #6), bonuses, technical support or added customer service. You can offer periodical product or service updates, discounts on added purchases, to name a few.

What you don't want to hear is "Your prices are too high," or the like, because what they are really saying is "What you are charging is not worth what I'm receiving." Ultimately, the point is as long as you provide outstanding value for the prices you charge you will have an ever-flowing stream of customers, many of whom remain loyal for years.

To uncover the rest of the massage parlor business wining tactics; please see "The massage parlor Business Marketing System for Radical Results"