The price you charge is part of your marketing. It is part of the story you tell and the story your customers tell themselves about your product/service.
Recently, I was confused. I did not believe what I was hearing from the voice on the phone.
A Life Saver was telling me that he raised his price — dramatically — to much more than the competition, which made sense given the vastly superior quality, the workmanship, the brand, the skill and experience of the expert that would be doing the installation, and so on. He had been charging roughly the same as the competition previously, or sometimes just slightly more, but had finally decided to stop being scared and get what he deserved.
That part did not confuse me. That made sense. What he said next was confusing: “I am closing more jobs with the much higher price. And I am closing them easier. And no one is haggling. And I’m getting more reviews and they are referring more of their friends.”
Economics 101 tells us that when we raise the price, we lose volume. That’s the trade-off. Sometimes it’s worth it, sometimes it’s not, but that’s the choice we make.
So, at first, I brushed off this one story as anecdotal. Part of me thought he was maybe full of baloney.
But then I started hearing the same thing, again and again. “I raised my price, and I’m selling more.”
And then it hit me. I figured it out.
The original offer seemed bulletproof from the Life Saver’s perspective: I am going to offer you something much, much better, but you’re going to get it at the same price (or maybe just a little bit more) than the other one. It’s a no brainer. Because the Life Saver really, truly KNOWS how much better it is. He knows what he’s offering is a bargain.
But that’s not with the customer hears. They get all of this explanation on why the Life Saver brand is so much better, in every way, and then they get the price, and it’s about the same. This doesn’t add up. This isn’t how things work. It must not really be that much better. Because price matters. The price is part of the story we tell ourselves about what we buy.
If a Rolex was the exact same watch, but you could buy it for $100, would anyone care about it?
“But my customers, in my area, in my industry, all they care about is price. They just want the cheapest one.”
Really? Look at their house. Is that the cheapest possible house they could find? Are they driving the cheapest possible car? Are they wearing the cheapest possible clothes? Is there a child in the cheapest possible stroller? Of course not. They did not only care about the cheapest price for those things, and they don’t only care about cheapest price for your thing either.
In fact, when price is the only information available, a higher price may make something feel like the better/safer option.
I offer you a new phone case for your brand new iPhone. One is 50 cents ($0.50). The other is $30. Which do you choose?
You probably picked the $30 one. But I didn’t tell you anything else about them. You didn’t know what they look like, or the quality, or even the name of the brand. All you knew is the price, and you voluntarily chose the more expensive one. Because that one must be better and 50 cents is too cheap for a phone case.
If you’re going to claim that you are the vastly superior option, you must have the price to go with that, or people won’t believe you.
Now, what about the better reviews and referrals the Life Saver was getting?
If you are the cheapest, people might tell their friends because they also want them to get that deal. This isn’t the referral you want. You don’t want to be known as the option that’s only worthwhile because it doesn’t cost much.
But these people are less likely to go online and leave you a great review. They didn’t pick you because you were great. They picked you because you were cheap. And nobody is proud of that. Nobody cares about that cheap thing they got.
Because we care more about the things that we are invested in. The more money, the more time, the more energy we have put in to something, the more convinced we are how wonderful it is. We are more proud of it. We are more loyal to it. This is one reason the military puts soldiers through boot camp. That is why people love their alma maters for the rest of their lives. That is why there are such fierce debates between iPhone vs Android, PlayStation vs XBox, Republican vs Democrat, and so on. The more you have put into something, the more you attach it to your identity.
So, if I buy what you are selling for a much higher price than the other options, I am now invested in that thing. I am going to justify to myself, and to others, how much better this thing is, all the reasons that I bought it, and how smart/savvy/responsible/BETTER I am for having chosen it. I’m going to post about it on Facebook. I’m going to show it to my friends when they come over. I’m going to go leave a review on Google. If I pay the average price, I perceive my purchase as an average experience, I’m less invested, and now I don’t get to tell that story.
The price is part of the marketing.
Now, an important part of this is that you actually have to be better. That is why so many people just try to be the cheapest. If you are the most expensive, you’re making a promise. You are making a claim that you are special, worth it, and deserve to be talked about.
That is why these Life Savers have discovered this phenomenon. The Life Saver Pool Fence actually IS better — you can see it, you can feel it, you can read the results of the scientific testing data, you know it’s backed by a lifetime warranty. And if the strength of the product itself isn’t important to you, then you might care about how Life Saver donates free pool fences to families who have had a fatal or non-fatal drowning incident, or how Life Saver gives to every drowning prevention non-profit in the US that we are aware of, or how Life Saver was started in my parents’ garage over 30 years ago and we still make pool fence by hand every day in Delray Beach, FL, sliding sturdy aluminum poles into slots on a long wooden table and stretching the mesh over before screwing everything in place, almost exactly like my dad did more than three decades ago. Depending on who you are, and what you care about, one of those stories, or some combination, might lead you to believe that Life Saver is “better” and worth paying more for. If you are going to rise above and be the one people believe they SHOULD pay more for, what is the promise that you are going to make? Can you keep that promise?
And when you choose to be exceptional, not every customer is your customer. Porsche isn’t for everyone. And neither is Land Rover. And the people who buy Porches aren’t the same people who buy Land Rovers, even though the price on some models might be similar. That’s okay for Porsche and it is okay for you, too. Not everyone will choose a Life Saver Pool Fence. That’s why we also have Pool Corral and Pool Fence DIY. All three of those are removable mesh barriers intended to protect your pool, but each one is intended for a different kind of person, just like Jeep, VW Bug, and Mercedes are all vehicles, but they are all intended for very different people. And just like with those cars, the difference between those people isn’t just what they are willing to spend. It is the very fabric of who they are, what they care about, and the ideas they identify with.
If you really are remarkable, then give people the opportunity to pay you enough that they have a story and devotion that is now worth remarking upon. Give people the chance to invest enough in you that they can be loyal. And then keep the promise you made by charging that price, and generously reward their loyalty.
(Did you dig that like a dog digs under a fence? Did you at least get what you paid for? I hope so. If you did, could you please share it with people? You might really help someone. Also, some people who read this are CRIPs — Creatures Realizing Infinite Potential. You can also be a CRIP and never miss a blog post. Just text the word CRIP to 484848. What if the next one is the right combination of words that forever changes your life? Weirder things have happened. Some lady eating a bat in China made the NBA stop their season. Life is crazy. You never know. But I promise I will only text you one time per week. Who doesn’t want a nice text on a Sunday?)