How To Charge More For A Product & Still Get More Customers Than Your Competitors

For many businesses, competing for the price is a very important strategy, but sometimes being the highest priced seller in the marketplace isn’t a bad thing. In this post, I shared with you ways on how to charge more for product & still get more customers than your competition.

One of the effective ways to ensure that a business remains profitable is to get paid what you’re worth. The higher the margins, the easier it is to stay in business if you’re selling. However, many people find it tough to compete with overseas companies or other companies that often sell their services or products for cheap. Most people end up reducing their prices in an effort to convince customers to choose them.

My most recent business venture has our company selling products directly to consumers. While a lot of our counterparts and competitors are often times 75% cheaper than us, we have built a brand around being the higher priced product. While there are still many consumers who prefer the cheaper price point, we have built a really strong customer base that prefers our offerings.

If you’re struggling to stay afloat because your margins suck, try increasing your prices. Most people will always advise you to keep lowering your price point until you’re ready to go out of business, but I’ve helped some businesses become really successful by advising them to do the exact opposite, which is increasing their prices. In this post, I will be sharing with you some ways on how to charge more for product & still get more customers than your competition.

1. Stand Out

Imagine a world where your product is so damn good that people don’t even notice the cheaper alternatives or offerings of your customers. How can you stand out in such a way? There are tons of ways to do this. Whether it’s your branding, marketing, story, partnerships or another factor, see what you can do to stand out in comparison to your competitors.

Having a product or service that is extremely unique will give you the opportunity to price yourself significantly higher. Let me give you an example. The backpack company Herschel  charges $75 for a basic backpack with two pockets. I went to local retail store by my house the other day and saw the exact same replica for $9. Why has Herschel been able to price the same item 8x higher and acquire so many customers? They simply created a marketing strategy catering to hipsters. Their competitors were marketing to youngsters who were going to school and Herschel decided to cater to an older market who could afford to spend more on a backpack.

Imagine going to your local retail store and seeing the two bottles in the hand soap isle. Which one is catching your eye? Which one is more expensive? While Method is obviously the more expensive choice, it’s also the one that catches your eye. Inside both bottles, you have regular hand soap. However, Method can charge a higher premium due to their modern branding, better labeling and approach.

2. Offer Quality That Can Be Seen 

When you aim to be a low cost provider, it’ll limit how good your quality can be. However, some people will really shell out some serious cash for higher quality items. I used to be a bargain hunter, but recently I’ve also been valuing quality over quantity. When I go to the grocery store, I’m looking for the product with the highest quality and I look into the little details.

If you’re a company that prides itself on creating products in the USA or using a special ingredient that is better for your health, advertise that. While people may be shocked at the higher price, they’ll understand why you’re charging it. If you can showcase your higher quality products or services to consumers, they will be far more open to the idea of it.

3. Specialize And Dominate

A big way to differentiate yourself from the competition is to specialize. When you specialize your products or services, you force your competitors to either follow suit or you leave them hanging out in the dry. Let’s jump into the Herschel backpacks example from earlier.

People have been selling backpacks, purses and other goods of that sort for decades now. Why was Herschel successful? Well, they decided to specialize and cater their products to a specific niche. They saw this trend of ‘Hipsters’ on the rise and they decided to specialize their backpacks towards them. Today, more than just hipsters are buying their products. However, when they first decided to specialize, they dominated by focusing on one niche/group they knew were willing to pay a higher price.

4. Smarter Marketing

With my latest company, we realized that intelligent marketing alone can allow you to charge a higher price point. My competitors have such a low price point that they can’t afford to spend much money on marketing. Bingo, that’s my advantage. I can outspend my competitors due to my higher margins and get a wider reach for my products.

Look at your business, products, services and offerings to see how else you can market your business. Is there a marketing method that you think would work well but you haven’t been able to try due to budget constraints? This is the time to charge a higher price point and test that marketing method out. Often times, you’ll find your business being more profitable even though you may be selling less items.

5. Be Confident

Part of the reason that a product or a service is worth more is that the team offering it is extremely confident. Believing that your product or service is worth more will make it easier to convince your customers. I remember I had a consulting client a long time ago who was offering personal training and meal prep coaching. When I met him initially, he was extremely timid and would say things like, “$15 a session would be fine, I mean if that is okay with you.”

After servicing a ton of clients, but being barely profitable…he decided to reach out to me for my consulting help. I saw his confidence level low and even worst, he didn’t value himself highly enough. I knew he was offering a great service because all his clients were getting results, but he just didn’t command enough respect. I coached him on declaring his prices instead of asking and increasing his self-confidence, which enabled him to charge $75 a session.

6. Know Your Competition

One of my best skills in business has been knowing my competitors inside and out. While knowing your business and industry is important, having a jump on your competitors is just as important. You can study your competitors and learn a lot.

For example, I’ve studied my competitors to see what mistakes they made and what things didn’t work for them. That enabled me to save a ton of time trying the same things that they had already failed at. If you’re looking to charge a higher premium, use your competitors as a measuring stick to see what worked and didn’t work. Understand why, improvise from there and take control from that point forward!

Conclusion 

For many businesses, competing for the price is a very important strategy, but sometimes being the highest priced seller in the marketplace isn’t a bad thing. In this post, I shared with you ways on how to charge more for product & still get more customers than your competition.