When it comes to marketing, one detail people often overlook is how pricing comes in to play.
If you think pricing is an insignificant part of your messaging, you should think again. Pricing is a marketing tool, not simply a way to get money. And while marketing may change your pricing, the opposite is also true – pricing should change your marketing.
Stories That Sell
In any sales transaction, countless stories are being told, including the stories we tell ourselves and the image we convey to those around us.
The exorbitant price of a brand name basketball shoe communicates an obvious story to the people who see you wearing it. And the rock bottom pricing at a clearance closeout tells your internal budget coach a story about what a fool you’d be to overlook this sale!
As a marketer, price determines what your business stands for, who you’re designing for, and the story you tell customers. How might that play out? Here’s a practical example.
Consider a baker who wants to adjust prices and marketing accordingly. This entrepreneur might take one of four approaches.
1. A Free Baking Blog with Helpful Recipes and Webinars
If a business wants to make money, it can’t afford to give away freebies, right?
A free idea is far more likely to spread than an idea that’s tethered to money. When a chef gives away her recipes or leads an online seminar, she’s distributing ideas for free, but building popularity and leverage for her name.
While you can reproduce her baguettes at home, enjoying a pricey, oven-fresh roll in her bistro is even better. This allows her generous compensation while building awareness, trust, and a larger platform to sell her products.
2. Products Priced for a Quick Sale
If the ingredients and overhead associated with a loaf of bread cost our baker $1.95, selling loaves for $2.00 may allow the baker to move a lot of product, and fast.
In this case, the marketing storyline should match the budget-conscious shopper’s mindset, using phrases like “your bargain bakery favorites” or “first-class French bread at no-frills prices!”
3. Mid-Level Markups
Say the baker decides to sell loaves at $3.00 apiece.
Now she makes more than a dollar a loaf, or more than twenty times she made at the previous level. If she kept prices a dollar lower, she would have to sell 21 loaves for every loaf sold at $3.00, which might mean the difference between a few customers an hour versus a line out the door.
To sell her story at the $3.00 level, the savvy baker might invest in a sparkling clean shop, a new sign in the window, and taglines like “artistry in every bite” or “you deserve something delicious.”
4. Majoring on Luxury
Here the baker prices loaves at $6.00 apiece, choosing to sell not just a product, but also a full-scale experience.
Loaves are nestled snugly in custom burlap bags and paired with a small spread of the customer’s choice. Elegant café seating allows customers to enjoy savory soups and decadent desserts onsite. Everything about the bakery screams indulgence, and marketing is based around taglines like this: “Heaven on Earth is here.”
Intentionally Shape Their Experience
As you price your products, craft marketing narratives that correspond to the story people will experience.
And remember, when people are heavily invested in a bigger financial commitment, they need narratives that justify this expense. Work hard to set their conscience at ease, and you will be rewarded with loyalty and sales.