Mark Wickersham (UK):
The Value Pricing System
https://www.wickersham.co.uk/a/6541/wWVxKzFL
If they don’t speak to and meet the specific needs of
a buyer, then you are going to harm your
chances of making the conversion.
There are really two ways to think
about this…
#1 – Customer Segmentation
Firstly, you can use this process
called customer segmentation.
This means you think about your clients,
about their different characteristics,
and put them into different buckets,
each one with a different set of
characteristics.
Then, having understood the different
types of clients, you then build your
packages to meet their very specific
needs.
#2 – Bespoke Proposals
If you are doing a bespoke proposal,
you might know exactly what the client
wants, so you think you don’t need to
give them different choices.
But you should.
You should give them
options if you want a higher price.
We can do this by sitting down with the
client and asking them questions. We
want to understand what’s important to
them.
What do they value?
We want to understand exactly what is
going to help them and solve their
problem, but we also need to know how
much they are willing to pay.
Make the middle option just right
We have to give choices, because they
might be somebody who doesn’t see a
huge amount of value in what we do, so
if they are given a high price they
will reject it.
But if we go in with a price too low,
they might have been willing to pay
more, so we’ve lost money.
You need to give options. The best
strategy is to make the middle option
your most appealing option.
Give them
exactly what they want at a high price,
and if they aren’t willing to pay that
then they will choose the cheaper
package with less value.
Rather than losing their business
entirely, you have given an alternative
option at a lower price.
Most people won’t even choose the lower
option because it doesn’t have all the
features they wanted.
We have to think about what the client
needs and cover that in the middle
option.
But there may be other things
you can do to make their life even
better.
You build those extras into
the most expensive option.
Some people will go for the highest
option.
But if not, you still have a
great result with your middle option.
There is a science to menu pricing.
It’s not just randomly putting a bunch
of features together.
There’s an art to it.
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