Understanding Buying Behaviour and the Quality/Price Balance
We all go through the struggle of undervaluing our own service and products in fear that no one will buy them for the price they are actually worth. It is part of the quality/price balancing act. The consumer buying behaviour has a lot to do with this and understanding this can go a long way in creating a quality/price balance that benefits both you and your consumers.
People need to feel that they are gaining value from their purchase, regardless of what it is. It is the psychology of the mind when it comes to price and the buying decision. When it comes to a brand, price can play a big part in how someone else values your product or service and more importantly how they perceive your brand.
Have you heard the saying, "you get what you pay for"? This all comes down to positioning. Men don't buy a Rolex because they need it to tell the time. They buy a Rolex because of what the brand represents; success. This feeling of success has a lot to do with the price point of a Rolex watch. Not many people would pay thousands of dollars for a single watch but those who can afford it will pay it because of the perception, stature and feeling the watch represents.
Let's imagine for a moment that you had a line up of 5 different brands of coffee machines, the base selling for $99 all the way up to $650. Before you even look into the features and benefits of each, you will ASSUME that the cheaper priced machine is well, cheap and the higher priced machine is quality. Why? Because we have grown up to know that the more you pay the better the quality. However, this isn't to say that one IS better than the other. It is all perception. Now let's say you don't want to spend $650 for a coffee machine, however you don't want to be cheap either, so you will probably settle for something in the middle of this price range. The point here is that everyone has a buying decision method. They have a pain point, feeling or emotion that drives this decision. Sometimes it is status, needing to feel exclusive and special, others get a thrill from saving a few dollars where they can. Knowing your customers buying behaviour can be extremely beneficial when pricing your product or service and can be the difference between coming across as cheap, expensive or valuable.
If you are struggling to price your service or products, perhaps these 2 points will guide you in the right direction.
Understand Your Markets Buying Behaviour
I have mentioned this throughout the blog already and for good reason, it is essential. To know this you need to look at the 'why'. Why do your customers need your product or service? What is their motivation? Do they seek a bargain or do they want that personal satisfaction that comes with owning a brand name item? Are they trying to solve a pain point or buy from impulse? Understand this and you will be able to price your product or service strategically and effectively.
Be Confident In Your Product or Service
If you genuinly have a quality product or service, half the battle is believing that you do. Through all forms of communication, it needs to radiate confidence. Car brands like Mercedes and BMW know they have a good product so every brand touchpoint says quality and luxury. So when people think of these brands, these two words usually come to mind and highly influence the buying decision (whether they are expensive or not). So don't feel like you need to drop prices to bring in customers. Sometimes you need to do the opposite to bring in the right ones.