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Are you shooting yourself in the foot with your pricing? Thanks to Mike Myatt for photo.

Are you shooting yourself in the foot with your pricing? Thanks to Mike Myatt for photo.

Everyone has their own take on pricing; some ideas are better than others.

This week I produced a  training video with  Tony J. LaGreca, president of Edmar Floorcare. His product is a vacuum that cleans deep pile carpet. One of the features of the vacuum is a sonic bar that vibrates at 200 per second. Tony pointed out I could say 12,000 per minute and that big numbers are better. I started thinking, numbers do matter.

 

Here’s my take on numbers.

 

  1. Customers like big numbers when they’re in their favor. Instead of telling the customer that the sale price on the $100 item is $40.00 why not tell them it’s 60% off? The bottom line is the same but 60% has a bigger punch.

 

  1. Always remember to explain to the customer how much they’ve saved rather than how much they spent. They can continue to justify their purchase for the next year.

 

  1. Everyone is looking for a savings or discount; this is why Marshalls and T.J. Max do such great business. The Goodwill is so busy they are now opening a boutique style shop. At least 1/3 of the Millenniums shop at Goodwill. So if they’re your customer, don’t forget they want to save money and are looking to save a buck. Check out the stats on the Millenniums.

 

  1. Let’s not forget the concept of “Lagniappe” something given or obtained gratuitously or by way of good measure. This expression thought of as New Orleans based, means giving the customer a tiny gift to tell them how much you care. It also helps soften the price; especially if the item is expensive. Think about serving coffee, bottled water or popcorn to make the customer feel welcome. Most retailers have a “kid’s corner” so the mother can shop. Ikea even has baby food in the fridge as well as a “Manland” baby sitting service with pinball machines and video games.

 

 

  1. If a  customer asks why you don’t carry the imposter  say you don’t think it’s a good product or it’s  worth the money. That will stop them in their tracks.

 

  1. When customers say, “I’ll be back,” ask them what they think about your prices. What do you have to lose? Pay attention to their answers and don’t justify your prices. Just listen. You can then ask the customer if you could explain why your prices are higher.

 

  1. Watch social media and see what your customers are saying about pricing in general. Are they talking about paying supermarket prices or the price of gas?

 

  1. Try different price points and test them on various products. Do customers like the $10.99 concept or is $11.00 okay? It was a big problem when JC Penney changed theirs to whole numbers.

 

  1. Connect with your customers on an emotional level, get to know them. The more you know about them and their buying habits the less likely you are to drop your prices.

 

The smartest thing you can do is not assume that price is the problem. Understand your products and the value you provide for your customers.

Lisbeth has been helping businesses build retail marketing and sales strategies for over 20 years. To schedule a consultation or have her speak at your business, reach her at Lcalandrino@nycap.rr.com .

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