How do you set the right price for your product or service?
If you’re thinking in terms of the product’s materials and manufacturing costs, you’re going about it all wrong.
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The right way is to match the price to its value, and then focus your marketing on showing your customers this unique value.
Defining the Value of Your Offer
Do you understand the value of your product or service?
The value is how it makes things faster, saves people money or time, prevents hassles, or solves problems.
It’s not only how your product does this, but how it does this differ from other products on the market.
To define what about your product sets it apart and helps people solve their problems, you should create a UVP – Unique Value Proposition.
This is a simple sentence that makes a promise to the potential customer, telling them exactly how using the product is going to improve their lives.
With this statement in hand, you’re ready to start demonstrating your product’s unique value.
Here are some guidelines for doing this.
Focus on Benefits, Not Features
Our natural inclination is to discuss the product in terms of its features.
After all, the features are what you’ve been developing, what you’re most proud of, and what sets it apart. But instead, focus on how these features translate into benefits for the user.
For example, your software program puts all of a user’s social media feeds into a single news feed. This is a great feature.
But go one step further and add that it saves the user time checking each individual feed and helps them more clearly see trends so they can make the right marketing decisions.
Know the Competition
It’s essential that you know the competition and their products well.
Your customers may have experience using a competitor’s product, so you need to explain how yours is different.
During product development, make sure your product offers something unique. If not, it still needs work.
If your pricing undercuts the competition, this will likely help you sell more, but your selling point shouldn’t be price.
If it is, any competitor with the resources to offer a lower-priced product will beat yours. Make sure there’s something unique about the product itself.
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Ask Your Customers
Your product’s value isn’t up to you. It’s up to your customers, so you need to rely on their feedback to figure out what it is.
- What have people told you they love about your product or buying from you?
- Why do customers switch from a competitor to you?
- Why do people keep buying repeatedly from you?
- Why do they become brand advocates?
Open up a dialog with your customers so you can get this feedback from them to reveal your product’s unique value.
No More Sales
Once you know how to explain your product’s unique value, the sales process becomes much smoother.
You hardly have to sell at all.
You just need to have a conversation with the prospect where you show them what your offering does for them and decide together whether it matches their needs.
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