How to charge a high price and still get customers

That is indeed the power of a premium brand. And contrary to the popular opinion, you don’t always need to spend huge amounts in marketing and advertising to create a premium brand. Remember, any great brand is built over two steps: make your customer a promise of quality that the customer values, and then consistently deliver on that promise.Have you ever wondered why do you go to a specific store to buy a certain product? For example you may buy your sweets from a particular shop. Now, there may be other shops that sell the same sweets, but once you are convinced about the quality or consistency of one shop, chances are, you will be willing to drive out of your way

and even pay a little extra to get your sweets from favourite store.

Naturally if your brand promise is to deliver a high value to the customer compared to the alternatives available, you will be able to create a premium brand, charge a high price and attract customers that value quality.

Now, getting to this stage can be difficult for many small businesses, as the natural instinct is generally to reduce prices. There are perhaps competitors who are driving prices down, or there is a big supplier in the market who works on a large scale and is therefore able to offer a lower price than most other firms. The easiest thing to do in this situation is to cut down your price, and then work backwards to reduce your costs so that you still earn the same margins.

Or, you could choose the alternative strategy of offering a premium product at a higher price, if the environment is right and you have the competency to deliver on this strategy. Further, choosing a premium product strategy has its clear pros and cons. We list some of them down below so that you can make an informed decision.

• One of the big advantages of the premium product strategy is a better margin per unit sold, which means that you need to target fewer customers to earn the same revenues. This allows you to establish closer ties with your customers and customer service improves as a result.
• With premium products, customer loyalty builds itself automatically over time. Customers who are willing to pay a higher price are the ones who see value in what you bring to the table, and therefore will not be constantly looking for bargains or lower-priced bargains.
• However, this strategy will backfire in a market where your customers are extremely price sensitive, or are adverse to accepting the extra value that your product offers, compared to the alternatives.

The general rule of thumb says that a specialist always costs more than a generalist. If you are able to position your business as a specialist in your field, your customers will have a good reason to choose you over the others. Remember, you do not have to be iconic brand like Rolex or Apple to be able to charge a premium. However, you can still establish yourself as a premium seller and charge higher, if you read your customers well and position your products right where they see clear and distinct value