“No matter how much you make, you don’t want to spend $4 on an avocado when you can get one for 59 cents.”“One-Percenters Keep Shopping at the Dollar Store” – WSJ.com
Let’s pause for a moment and think about how that would affect your business.
The quest to find a cheaper price is a never-ending quest for consumers but how you plan to do about it makes your business more valuable than the others.
The question is how you would persuade consumers to spend $4 on an avocado when you get one for 59 cents. This task reminds me of the movie “Wolf of Wall Street” when there’s a famous scene from the movie.
Here are 3 ways you can use to have customers continue to pay $4.
In fact, it’s your responsibility to educate, position your product as a solution, and more importantly elevate your customer’s status when using your product.
There are several ways you can do this:
1. Value-based approach
By explaining to users how this pen can add xyz values to their lives and thus justify the values of the pen. When you provide more information about the product/service to your customers, it would create a tension point and automatically invite them to reconsider your offer.
In our example of an avocado, if I added something like “do you know we are sourcing our avocado from a farm using no pesticides or any GMO seed? In other words, our avocados are grown naturally without any chemicals”, how would this piece of info change your position?
2. Problem-solving approach: by understanding your customer’s problem and position the pen as a solution.
Once again, from the avocado example, knowing you have the habit of writing your journal on paper and smudges from poor quality pen can affect your journal-writing rthrym and even make your journal hard to read or share with others.
3. Elevating Status & Bragging right
Why would you spend $10 to buy a pin at Disney while you can find it online for cheaper?
What makes customers willing to pay more is the status and bragging right when you show the pin to your friends back home. Having money for Disney trip is an status-elevating act that you are willing to shell out extra bucks for.
So the shift of high end customers to downstream options like Dollar Stores can be intimidating and alarming to you if you joined he rank of others selling commodity.
At the same time, it creates an opportunity for you to educate customers about your brand and build more brand equity over time.