Service is a value proposition! Sometimes people value being served and sometimes price or convenience are their only drivers.
Denise Lee Yohn, branding expert who has worked for Burger King, Jamba Juice and others notes:
“Pricing is not about one number. By determining your worth and building value perception around that, your pricing strategy can strengthen brand perception and differentiation. Setting the right price points is no easy task. In today’s post-recessionary economy, product pricing is particularly tricky because consumers’ perception of value is confounding and seems to shift constantly. People will camp out overnight for the chance to buy a $499 iPad, but you can’t seem to spark any interest in a $4.99 burger combo.”
Here are three quick hits from Denise, as you think about pricing:”
“Reinforce your brand identity. Use price to communicate what your brand stands for.
Vary price to target customer segments. Use variable pricing to appeal to certain customer segments.
Be clear about your competitive positioning. Don’t be afraid to charge more if you’re competing on quality, exclusivity, or a superior experience.”
Brands I’m close to (like Famous Dave’s Barbecue, Starbucks, Ritz-Carlton, Pike Place Fish Market, Zappos, Toyota, etc.) especially understand Denise’s point about competing on quality and superior experience.
Elevated pricing sets expectations for superior experience! Over-delivering that experience not only justifies the higher price but creates “wowful” value and brand loyalty.
How do you set prices in your business?
Do you offer variable pricing options for differing customer segments?
Does your experience over-deliver on your price, drive perceptions of value, and lead to loyalty?
Joseph Michelli, Ph.D.
Joseph Michelli, Ph.D., an organizational consultant and the chief experience officer of The Michelli Experience, authored The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company and the best-selling The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary.
[Recorded Sept 26] Traditional Voice of Customer surveys have a blind spot to real-time feedback on social media and call center interactions. Learn how progressive companies are mining Big Data to improve the customer experience, reduce churn and even boost agent selling.