This is an interesting marketing concept that you probably haven’t put nearly enough thought into. “Price elasticity” just refers to the sensitivity of sales of a product or service to a change in its price. Most business owners have an artificial idea in their heads about how much they can charge for what it is they are selling. In reality, the cap may be much higher.
If you can charge more, shouldn’t you?
This may require a lot of will power and faith to overcome some strong psychological programming. I am guilty myself (many, many times in fact) of being weak when it came to quoting a price or asking for money. You cannot be timid when marketing your business or your products. And you owe it to yourself to test the market at different price points.
Perhaps what you sell can be wrapped up in some kind of bundle. Or perhaps you can just offer more of whatever it is. Or maybe you can offer exclusivity. There will always be a buyer at the very highest point of the price scale…just because. Even if you sell a commodity that is subject to intense price competition, you should try to find a way to charge more by packaging it or presenting it in a different way.
A good every day example of premium pricing for commodity products can be found in your local grocery stores. Certain types of foods can be sold at a premium by being labeled “organic” or something similar. And customers who prefer that variety of the product pay two to three times more for it.
Technology makes it easy to test different price points and offers. You can create an infinite number of offers and prices and test them by creating website landing pages and using paid search marketing to drive targeted traffic to them (surely you knew I would work a search engine marketing angle into this article)?
You could even create a completely separate company to test a much higher price point with a different marketing message. These day you can create a new company, including opening a bank account, for under a grand. This is actually a good idea if you have identified several distinct markets you want to target. The closer and more specifically your name, message and presentation match your target market, the higher the perceived level of trust.
The main thing is just not to let preconceived notions or what you see everybody else in your industry doing dictate what you do. It is worth finding out how much you can really charge. Differentiate yourself. You owe it to yourself to maximize your profits, and selling the product or service you provide at the right price is one component of making that happen.
I would love to talk to you about the Internet component of your marketing campaign. Call or email Work Media today.