Raising Prices, Sales & Credibility All At The Same Time
Is it easier to sell a cheap product or an expensive product? The answer isn't always obvious and new content this week looks at why being expensive can be a good thing.
One new post looks at the advantages of being expensive.
- Being expensive adds credibility to your brand. Sure – your marketing can make all kinds of promises about the quality you provide but the prices you charge send a much more powerful message.
- Higher prices also affect how you enjoy a product – we included some research from a study that clearly showed people who thought they were drinking an expensive wine clearly enjoyed it more than a "better" wine they were told was cheaper. They didn't just think it was better – they were connected to an MRI and it showed their brains truly considered it better!
- And of course high prices also let you use anchor prices as a tool.
A second post looks at a real world example of two companies competing to be the most expensive. It's counterintuitive – we think (or at least hope) that companies compete by cutting prices and sacrificing margin on their products. In many cases the opposite is true – higher prices are used to be more competitive. In this real world case study we look at a company that expected a 33% increase in the price of it's flagship product to result in a 200%-300% increase in sales.