It is commonly known that Apple products are priced way above the average phone and yet they are one of the most popular brands on the market. Apple phones in essence, do the same as any other phone; they make phone calls and send text messages, so what makes them so different and how do they get away with making their products so costly?
To answer those questions Joe, from Imara DP provided us with a fresh new take on pricing strategies with The Psychology of Pricing.
Joe advocates a more value-centric method of pricing and that our positioning strategy should be tailored around the problem we are solving for our customers and ensuring that we give value in that solution. Get this right and you could charge what you believe your products/services to be worth rather than what you think others would pay for them.
In the case of Apple, it’s the added value that comes with their products that makes the cost justifiable. Amongst many qualities that Apple products claim to have, they are renown for their reliability, for their privacy features and for the prestige nature of their brand. This is consistently and heavily promoted through their marketing and is the key to their success.
So the key things to remember are that we shouldn’t charge competitively because if you charge the same as everyone else, then you become one and the same as everyone else. You essentially become a commodity and customers will have no real reason to purchase from you over somebody else. A customer’s choice on whether to buy a product or service is based on the perceived value of the product or service and that value is created by providing a solution that answers a problem and meets your customer’s needs. That value is what makes you different from others and is what will make you stand out amongst the rest.
Evan gives advice on how to get your clients aboard with value-based pricing