How To Sell At Higher Prices Than Your Competitors
Would this increase or decrease your Internet business income...
...if you charged 10% to 20% more for your products or services than your competitors do?
Most entrepreneurs... right off the bat... think if they had the highest prices in their marketplace that they'd lose business and struggle to get customers.
Not so.
When you understand the right way to position and present your prices, your higher fees become irrelevant to most prospective customers.
In fact, when positioned and presented correctly, your higher prices will actually make your products or services more appealing to prospective customers.
It's all in the presentation of your prices.
So, what's the correct way to present your prices so you can successfully charge more than your competitors?
Well, there are a couple of ethical tricks to get prospective customers to see the value in paying more for your products or services than a competitor's.
Let's talk about one of the methods.
It's a method I stumbled upon while doing some work in the fitness industry.
You see, the company I was working with owned several health clubs in the central New Jersey area.
And, all of their clubs had higher membership rates than all of the other surrounding health clubs and gyms in their area.
So, how did staff members handle that when walking prospective members through their facilties?
Well, they brought up the fact that their club's fees where higher than their competitors fees - BEFORE the prospective member had the chance to say that.
Huh?
Yes... you read that right...
The health club company staff actually brought up the higher fees themselves, before the prospective member had the chance to, and then actually bragged about them.
Why would they do such a thing?
It's actually pretty simple.
The staff was trained to bring up the higher price and brag about it to prospective members as a way of explaining away the "price objection" and eliminating the need for the prospective member to ever bring up the higher price again.
The staff members actually took the higher price and turned it from a negative into a HUGE POSTIVE.
Let me show you how they did this.
Here's a little example of what they would say about their higher fees as they were touring a prospective member through one of their health clubs.
"Now, because we have higher fees than most of the clubs around here, we never get overcrowded, you never have to wait for equipment, and you'll always be able to get in, use the exercise equipment you want, and then get out in the shortest period of time possible."
So, now, think about it...
What could the prospective member possibly say about the higher fees?
Nothing.
Why?
Because in the above example, a valid reason was given for the higher fees.
In fact, the reason given for the higher fees actually conveyed several benefits - never have to wait for equipment and will have efficient, convenient workouts, etc.
Basically, what the staff members were communicating to prospective members was this:
"Sure you can find cheaper clubs.
But, they'll be overcrowded, you'll have to wait for equipment, and it will take you longer to get your workouts done (how much is your time worth).
If you're aok with that, and that's what you're looking for, there are several cheaper clubs to go to. BUT, if you're looking for a club with all of the benefits we've already gone over, here are our fees..."
Now, they wouldn't actually say that, but they certainly conveyed it implicitly in their presentaiton.
And, it worked like gangbusters for them.
The point: there's nothing wrong with having higher prices than all of your competitors as long as you can give prospective customers a valid reason why - a reason that they benefit from.
And, if you can bring up the fact that you have higher prices and then find a way to brag about them (because of a benefit you give customers that nobody else does), even better.
All in all, remember, if price was the only thing people considered when making purchasing decisions, we wouldn't have Nordstrom's, Starbucks, Mercedes Benz, first class plane flights, or Marriott's.
Everybody would be shopping at Walmart, drinking Dunkin Donuts coffee, driving a Hyundia, flying coach, and staying at a Motel 8.
But we know that doesn't happen.
Why?
Because people make their buying decisions based on value.
And, it's your job to show them the added value they get with you and your higher prices.
The Hibachi Business Method
First, welcome to my brand new blog. What you're now reading is the very first post among what will be many. So, grab a coke, sit back, and enjoy...
Having only recently moved to Southern Florida (from New Jersey), I jumped at the chance to spend Father's Day together with my wife, kids, parents, and sister's family.
I think it's been something like 8 years or so since my whole family's been together on Father's Day. So, it was to be a special event, or so I thought.
Tokyo Peking, a local Japanese hibachi restaurant, was our locale of choice for the celebration.
There's nothing quite like watching an Americanized Japanese chef flipping, slicing, shoving, and spicing up your food right before your eyes.
It's quite the treat.
Anyway, things quickly took a right turn while I was ordering my filet mignon, fried rice and pina colada combo.
Upon pointing out the waitress that my two little girls were going to be sharing one single order of fried rice, she instantly burst into a tirade about a $5.00 "sharing" charge we would then incur if we were unwilling to order more food for the kids.
"Huh? $5.00... for what? To share a $3.00 order of fried rice", I asked.
"Yes. To share it's $5.00."
"Okay, well then instead of sharing for $5.00, how about we just order another thing of fried rice for $3.00. Is that okay?", I inquired.
"I'll have to check with the manager. I don't want to get fired", she rebutted with attitude.
"Check with the manager... for what?", I thought to myself, shaking my head in confusion.
Now, please understand... my amazement at the attitude of the waitress and, even more so at the sharing policy, had absolutely nothing to do with the 5 bucks.
It did, however, have everything to do with the business practice of the restaurant in charging more for the same amount of food just because it's being consumed by an extra person.
To me, it's a policy that reeks of greed, and has no legitimate business validity - at least not in this joint.
And, it's useless, damaging policies like that that leave a bitter taste in consumers minds.
Believe me, I'm certainly not the only person who's been offended by this restaurants additional money-making charge.
"Not for nothing, Todd, but a sharing charge of $5.00 to $7.00 per person is very common in restaurants around here.", belts out my father.
"With all of the old people (as if my father isn't one of them) wanting to share dishes, it's an extra way for restaurants to generate extra money", he says.
And right there is a MONSTROUS BUSINESS LESSON.
"Here's what I would do if I owned a restaurant", I say to my dad.
"I'd do the complete opposite of what everyone else is doing, and I WOULDN'T have any sharing charge. And, I'd make it known to everyone. I'd advertise it all over the place. I'd focus specifically on the old folks who want to share. And, because we'd stand out and offer a highly-desired benefit that nobody else does, I bet we'd clean up."
And, I've got to tell you, I really believe we would.
Why?
For several reasons.
First, because business success is all about DIFFERENTIATION.
It's all about preventing the commoditization of your business, by turning what you do compared to your "competitors" into an apples to oranges comparison, instead of apples to apples.
Business success is all about finding the gap in your marketplace - the lacking benefit your target market so desires - then serving it up to them.
So, here's the question to think about: what real, tangible benefit do customers get from you, that they can't get from anyone else in your niche, industry, or profession?
If you can't answer that, push everything off of your plate until you can. It's that critical.
The second reason I'd immediately dump the sharing charge is because it plain out doesn't feel good to consumers.
It certainly doesn't give someone the warm and fuzzy's about your business if your charging them, or doing anything for that matter, that benefits you more, not them.
Remember, your customers, clients, patients, etc., are the most valuable asset you have in your business.
They're more important than every desk, computer, employee, website, and sign you own.
So, for crying out loud, take care of them.
Don't try to wring every last cent out of them at every corner.
No, just the opposite.
*Look for every opportunity to over-deliver value to your customers.
Give them more than they expect. Never less.
Give them surprise bonuses, gifts, extra goodies, something special.
Remember, without them, it doesn't matter how good your product or service is. Without them, it's lights out.
Frankly, even though we didn't have to pay any sharing charge during out Father's Day outing, the whole experience seemed to have tainted everyone.
The consensus after the meal: "I think that was the last we'll be seeing of Tokyo Peking".
I agreed - even though I did take my extra fried rice and a piece of steak or two home in one of those little white and red boxes. 