Questions

We are launching a new service for the bride/wedding market. There is demand for this service, however, it does not yet exist in the market. For that reason, the customer has no price reference to compare from and then decide. How do we convince customers we offer a fair price and reduce price sensitivity?

Your service may be new but it must solve a problem, Right? People will accept prices that offer value.

Value = Perceived Cost of Not Buying – Price

The perceived cost of not buying refers to all costs, monetary, time, image, social costs, etc. Some may be harder to quantify and many will be subjective in the minds of different types of prospects.

For example, you may be willing to pay extra for milk at the corner store because of the perceived time cost of travelling to a supermarket which is further away. The convenience store provides value, even at a higher price, because they've relocated the product closer to where you are.

The corporate executive may travel in a private jet because he perceives a 'social cost' if the other bigwigs discover he 'flies commercial.' You get the idea.

You need to identify what the costs are for your prospects not to buy so that you can help define a value proposition for them.

I did this once with a junk removal business. We adopted the tag line 'enjoy the space you paid for' to reinforce the fact that every moment they did not hire us to remove their refuse, they could not use the space they were paying for. This was meant to highlight the perceived cost of not acting.

Hope this helps.


Answered 5 years ago

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