Why Do The Companies Charging The Highest Prices In Any Market Always Seem To Be Doing Better Than Everyone Else?

Why Do The Companies Charging The Highest Prices In Any Market Always Seem To Be Doing Better Than Everyone Else?

So many people tell me that their customers only buy on price.? However, if that were absolutely true, a simple reality wouldn’t exist.? In most markets there will always be a company that is charging higher prices than almost everyone else and yet, they are usually doing much better than everyone else.

They’re not doing better because they’re charging higher prices - they’re able to charge higher prices because they do better!

Higher Prices Are The Best Insurance A Customer Can Have

If customers only bought on price, charging higher prices would push them out of the market.? In fact the opposite often occurs, they find a way to charge a higher price and that gives them greater advantage, in doing what they need to do, to really deliver to their customers at a high impact level.

When a company delivers exceptional value, and they charge a sustainable price for delivering that value, the revenue and profit generated allows them to do everything needed to deliver the outcomes promised to their customers.

When a company sells at a bargain basement level, they are forced to cut corners that might be needed to guarantee the result to the customer.

The brutal reality for customers is that buying a cheap solution often also involves buying a reduced level of commitment from the seller.

When the seller is economically and emotionally rewarded well (Payback), for impacting their customer’s situation in a meaningful way, they are much more likely to go all in on making sure they get the result.

Risk Reversal And Guarantees

In a recent Models Method Sales Masterclass I shared a Futures Model view on price positioning, and how you can use the idea of guaranteeing the pathway to the result as a rational for premium pricing, rather than guaranteeing the result itself.? In short, Protection for the customer.

I’ve captured a short snippet from my Masterclass to explain this further.? The snippet explores the idea of pathway certainty and the risk reversal along that pathway as the reason for premium pricing.? You can use this thinking to map out how you can offer risk reversal to position higher prices.? You can also use this model to explain to customers why your prices are higher and how your higher price allows you to offer greater certainty. You can watch the snippet here; https://createmymodels.com/snippet.

The Price Turbocharger Model

There is a whole framework underneath this discussion that allows you to have that certainty of pathway leading to results.? With customer outcome certainty comes premium price positioning.

That framework is contained inside my Price Turbocharger Model.

The Price Turbocharger is like a propellor for your business, it pushes you forward.

The six blades of the propellor allow you to position into the market at a higher level.

There isn’t the space in this newsletter to cover the whole model, but the two blades I have discussed (payback and protection) are keys to guaranteeing the pathway and therefore elevating your price.

Price Is A Critical Strategic Discussion

Price is a big topic and should be a conscious and strategic discussion in every business. This includes how you strategically structure and position your price AND how you make the offer in your marketing and selling.

Remember, in order to have an average market price, some companies in the market must? be above the average and some below.? Why not make it you that is above average!

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Thanks for reading.? If you’d like to watch the full Masterclass replay where I discuss How You should Talk About Money In the Sales Conversation go to https://modelsmethod.link/masterclass-may-2022-encore