If you're like most folks you'll have run into the price vs. value dilemma. No, not in your marketing strategy, but just lazing over coffee and looking at real estate. There in front of you is this great looking house in the real estate section of your newspaper, and you notice that there's no price for the house. And that gets you a bit steamed up, doesn't it?
Just like when you're buying a product online and there's this long, scrolling page, and there's no price right at the top.
And yes, that gets you mad too! Because you reckon you'd be so much better at taking a decision if you knew how much the product/service costs. But no, there's this long page. And there's no price in sight, till you get to the bottom of the page. And yes, you figure that if you got mad about this long, scrolling page, then other customers must also get mad about it. And so you decide you're going to have a short page, and you're going to put the price upfront.
And you could be horribly mistaken
There are several reasons why you could be mistaken:
1) You aren't taking into consideration the price point.
2) You aren't taking into consideration the branding and trust issue.
3) You aren't taking into consideration how the value needs to be built up, if the price point is higher.
So what's the price point factor?
The price point is something akin to getting to a page on Amazon.com and finding a book that's $25. And then assuming that your product (which is at $100 or $1000) needs to be displayed in the same manner. And you'd be off the mark, because it's way, way easier to justify buying a $25 product than it is to buy a more expensive product. The more expensive products need justification in more ways than one. For one, there's the price point (as you already know), but there's also the issue of the product itself. A book is a book, is a book. A product like a zingometeronix at $5 may be way too expensive if you don't know what it is, or what it does. So yeah, what's good for Amazon is not necessarily good for you.
But hey, doesn't Amazon sell big ticket items?
Si, si, they do. But you trust Amazon. You trust them implicitly. And then the product you're buying off the site will probably be another branded product. And so you've worked out this product in your brain, you've probably seen in on the shelves, you've probably even used it some place. And so you are not just buying a product. You're buying multiple layers of branding and trust.
Now you compare this with some product or course you're selling and you'll notice that you don't have the same power as Amazon. Yes, your customers may trust you as much or even more, but they need to be sold the value of the product long before they see the price. Logically speaking, we all want to know the price upfront. But when we're buying products and services, our brains are going through a complex set of decisions. And therefore value must come long before price.
And don't believe me.
Test it out for yourself. Create two pages. One with the price at the top. And one with the price at the bottom (after all the yada, yada scrolling) and see which one sells more product.
What do you think? Which one will win and why?
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