What makes something expensive?
Is a £52,000 car expensive?
To some people - absolutely. In fact, they’ll probably turn their noses up, crack a wry smile at what is - in their opinion - a daft price to pay for a method of transport, and move onto something with a much lower ticket price.
But what about the person who loves cars? Will they see that £52,000 car as “expensive” or a perfect buy?
More importantly, would they opt for a fourth-hand £2,000 hatchback instead?
Of course they wouldn’t. And this is because people buy cars for all sorts of reasons. Those who turned their noses up at the £52,000 model simply don’t see the value in it, whereas some will believe it delivers massive bang-for-buck.
Wow… that’s an expensive bottle of whisky…
Another example.
In Edinburgh lies the Scotch Whisky Experience. Their most expensive bottle of whisky stands at an eye-watering £30,000.
But is it eye-watering to everyone? Absolutely not. Ask the team at the shop if they’ve sold any and they may tell you the story of a chap who entered the store, purchased it without hesitation and declined the accompanying box and paraphernalia that came with the bottle.
He simply wanted to take it back to his hotel room and drink a glass. To him, that £30,000 represented value he was comfortable with. The price was irrelevant.
Price is at the bottom of the list for many customers
That might sound like an odd statement, but it really is true.
We are price conscious - there’s no denying that - but price simply isn’t the reason we’ll decide not to purchase something.
People will only buy something when these three conditions are met:
1. Confidence in the service or product.
2. Confidence in the company or brand.
3. Confidence in the salesperson or website.
Once there’s a nice, big green tick next to all three of the above, people are far more likely to press the ‘buy’ button - regardless of price.
Why pricing needs context
When you bought your last smartphone, did you simply buy the cheapest one on the market?
No, of course you didn’t. Instead, you bought the phone which best suited your needs, and which sat within your budget. You wanted to know it offered value and did what you wanted it to do.
That means you didn’t buy it on price alone. Maybe it was the camera which caught your eye, or perhaps you were drawn to Android over iOS. Maybe there was simply a better tie in with your favourite network provider.
This is why price always needs context. When clients buy from you, they need to know what they’re buying and the REASONS they’re buying it.
The key lies in creating reasons that really matter. The more something matters to a person and the more those reasons are likely to change their life for the better, the more likely they are to buy. The price will be a factor, of course, but it’ll become far less important.
The term ‘impulsive purchase’ is therefore a bit of a misnomer; there really isn’t such a thing.
Think about the last time you bought something ‘impulsively’. You didn’t do it because it was priced higher than you’d normally be comfortable with. You bought it because it delivered value.
How much does it matter?
The price we’ll pay for something isn’t driven by desperation or fear of missing out. It’s actually driven by how much it matters.
For instance, if you need brain surgery and you want to have it done privately, you’ll probably get a few pricing options.
In that scenario, if you’re presented with one surgeon who charges £50,000 and another who’ll do it for £2,500… which one will you go for?
The price we pay for products and services is affected by how much it matters to us - not by the numbers that subsequently exit our bank account.
A final reality check
Whether it’s a car, new smartphone, or the dinner you’ll place on the table tonight, you probably didn’t buy any of it based on price.
You bought what MATTERS to you.
However, you wouldn’t have done if that item didn’t deliver one of the following:
- value;
- purpose;
- an experience; or
- relevancy.
Just like the three buying conditions I mentioned earlier, the above are subconsciously at the top of our minds whenever we buy something, and we place far more importance on them than we do the price.
This is exactly how your clients buy from you, too.
