MISTAKE #55: Your product is priced too high

This is one of the easiest mistakes to identify and easiest to fix, yet it is one of the hardest for companies to accept.

 I regularly work with clients that pursue a retail price that is higher than my work recommends.  At the same time, I work with plenty of clients that refuse to do the work or make the investment to get shoppers to not just accept, but approve of the higher price.

 Companies spend lots of time and lots of money on funding promotions or merchandising programs or coupons or rollbacks to temporarily get their product at the price that shoppers are willing to buy in the volume than expected. 

They would rather constantly deal with all this headache and frustration and inefficiency than to do any of the following four things to make the everyday price right:

1. Drop the price to the point that shoppers view it as a good (if not great) value, accept the impact on margin, and make it up in volume.

2. Invest in value-building marketing and content programs that create sufficient demand and perceived value at the higher retail price.

3. Modify the value proposition to reframe what shoppers think they are getting for the money they spend.

4. Target the right (narrower) segment of prime prospects willing to consistently pay the higher retail price.

I understand how easy this is to say and how much more difficult it is to do.  When I rehab homes, I have often made the exact same mistakes I mention above as I seek to get top dollar: 

I would set a price that was at the high end of what the neighborhood could justify.

I would try to avoid involving a realtor, but also try not to spend a lot of time or money marketing it myself.

I would hesitate to do the expensive upgrades like frameless glass shower doors or premium granite.

I would stick with the same design and finish I saw other builders doing, and end up going after the same "average" buyer.

But, over time, I learned that:

Most people want to feel like they’ve gotten a good value (only assholes brag about having the most expensive home in the neighborhood).

You can’t buy something you don’t know is for sale.

After seeing a lot of houses, people tend to recall just a few noticeable upgrades to determine which ones they see a second time. 

Having a unique house scared away some buyers, but brought full-price “I need to have it” offers from others.

GOT A PROBLEM?  JOIN THE CLUB. 

Could any of the house selling issues I have apple to your product?

Admitting that your product is over-priced is the first step to fixing it. 

But accepting this reality doesn’t mean the only option is to lower the price. 

If you really know your shopper, your category, and your product.  And you’re willing to put in the effort.  There are most likely lots of options to make your current price the right price. 

If you don’t know what you need to know or you’re not willing to put in the effort, you better drop the price before retailers drop your distribution.

If you want to maintain your price, but don't know how to fix your value proposition, let us help.

We don’t just tell companies what the right price is for their product.  We work with clients to develop the right proposition that gets enough shoppers to pay the price they want their product sold at.