Create value and get paid for it.
Upgrade customer experience
Although advancements can help your product stay ahead of the market, they typically heighten complexity and incur additional costs. Instead of tinkering with your product or service, are there parts of the customer experience - like delivery, installation, and customization - that would increase desirability and enhance value?
Ask your customers what product and distribution features might be worth a higher price. Map out your customers’ journey from identifying a need and researching options to purchasing, receiving, and becoming a product consumer. Look for opportunities where customers are willing to pay more for you to do more for them and help them appreciate the benefits of their purchase.
Offering faster delivery might require more work but may allow you to fetch a higher price, especially if a quick response warrants a “speed premium.” Businesses that specialize in service, product, and distribution can adjust prices based on time, responsiveness, and smarter, more-informed tracking methods that show when and where products will arrive.
Less packaging reduces the cost of materials and time. Consider how your customer receives, stores, uses, and recycles your product. Are there opportunities to eliminate steps or innovate the packaging process to improve loading, storage, restocking, or clean up? Don’t forget that “green” packaging methods may offer more value to customers that might pay more for sustainability.
Teaching customers how to use your products adds value by helping them appreciate all the features and benefits your product has to offer. Educated consumers are less likely to call with questions, which saves you time. Companies from Apple to Home Depot offer regular in-store classes on how to use their premium-priced products to get them off the shelves and into customers’ hands.
If you sell a complex product such as computers or software, technical education is a great way to increase revenue and add value. You can provide training before and after the sale, on an on-demand basis. If you offer one-on-one training, you can charge even more.
Offer add-ons and bundles
Add-on sales increase profits, even with discounts for customers that bundle, because the same resources that are used to generate one sale can generate several. Existing clients are probably more receptive to buying another product with less effort on your part.
When it comes to suggesting complementary bundles, sometimes giving up a little margin for more sales is a smart approach. Explore your inventory, suppliers, and business partners to find ways to combine complementary product pairings into bundles.
Find the right price point for the value you deliver.
Staying in touch with your customers makes it easier to find ideas that might add value to your product and allow for a price increase. Start by using “value math” to calculate what an enhancement might be worth to your customer. If your customer values time at $20 an hour and you save 15 minutes, is that worth a $5 price increase? Or maybe instead you could consider sharing the value created with the customer for a $2.50 increase.
Keep your value math in mind as you test your new enhancement and its price with your customer. Remember; pricing is not static. The economy is changing, competitors present many challenges and products designed to replace yours are often already in the works.
Being transparent about pricing with your customers allows them to give you real feedback on what they will pay for and what they won’t. You’ll also hear your customers’ wants and needs regarding your product, as well as the solutions they expect. Experiment and get feedback on different price points. Only then can you make sure you aren’t chasing away business with high prices or giving it away with low ones.
Sharpen your pricing edge and get paid for the value you deliver.
Talk to your Truist relationship manager about your plans to provide better value and generate additional revenue for your business.