I was in Bunnings over the weekend and decided to pick up some batteries. I could get 16 AA Energisers for $10. Not bad, I thought to myself. But just as I was grabbing them, something else caught my eye. Four AA batteries for $16. How good must these batteries be? … $4 each!
Needless to say I left with two packs of the premium, $4-a-pop, longest lasting batteries in the history of the world in my pocket.
I’ve read about this somewhere – and apologies to the author, I can’t remember where. Apparently a common shortcut we use to determine value is price. And most of the time that’s a pretty good shortcut. Premium unleaded must be better than regular because it costs more.
It’s worth deconstructing my battery buying expedition. My response to seeing a battery that cost 6 times more was “wow, how good must that be”. My emotional response was that I wanted to be the owner of such a great battery, I deserved that battery. All of this was based on the premium pricing – because they cost more, and only because they cost more, I wanted them.
Only then did my rational side kick in (it lasted longer, would save me time changing batteries etc etc). But basically I was only justifying the decision I had already made.
So consider using pricing to give yourself premium positioning – in other words, consider being the most expensive provider in your market. People will automatically assume your program is the best because it’s the most expensive, and will be emotionally drawn to it.
Obviously you need to be able to back it up – this is only a good strategy if you are the best at what you do. But if you do have the best program going around, and you are delivering all kinds of awesome, it's probably worth having your price reflect that.
Love to hear your thoughts – are you positioning yourself through price? You can leave them below (the picture above is what inspired this piece – thanks Mike).