Sydney, Australia (PRWEB) December 28, 2012
It may well be one of the tougher aspects in building a business: pricing strategy. In an economic downturn, can luxury goods be at a perilous position? In a thriving economy, can small businesses compete in a pricing war with big corporations? Pricing goods and services can make or break any company in any industry. So what’s a business to do? Well-known Internet marketing expert and highly successful entrepreneur James Schramko—and his new haircut—has the answer in this week’s latest business tip on SuperFastBusiness.com.
Relating a recent trip to a shop where he got his haircut, Schramko talks about his experience as a new customer and relates that experience to the value of price perception in generating profits. Schramko recalls what transpires from the moment he enters the shop and talks to the front line workers to the minute he sits in the stylist’s chair. He tells SuperFastBusiness viewers how he had begun to assume that the entire experience was likely going to cost him more than a trip to a regular barber shop, where the standard price of a haircut would go for AUD$22. After getting a massage, a spot of tea, and what he describes as a “neat” haircut, Schramko later on remarks that he would have gladly paid more than the actual fee, which came to a mere AUD$26, because of the unique experience.
Schramko points out that the entirely different—good different, that is—experience is what probably generates repeat business for the shop. His advice to every business aiming to achieve sale after sale, “If you can do something a little bit differently... if you can create a better experience, you can charge more.”
Providing exceptional customer experience not only validates considerably pricier goods and services, but it also reinforces another crucial business growth strategy Schramko has, time and again, advised businesses to do: offer value. Even in a slow economy, consumers might be inclined to pay more for a product or a service if they know they’re getting their money’s worth. In fact, SilverCircle, which is one of Schramko’s many products, is seeing impressive growth in business even as prices are set to increase. Another notable example of consumers willing to pay more for better experiences is the sale of luxury goods. Aspirational “alpha brands” like Rolls Royce, Louis Vuitton, and Apple have seen leaps in profits despite the global downturn.
In connection with pricing strategy, Schramko has also previously spoken about the knee-jerk response of low-cost pricing strategy in a grim economy and a market saturated with competition in a separate video. While he says that low-cost pricing does work for businesses the likes of Wal-Mart and Amazon, he nevertheless rarely advocates pricing products or services for a song. For businesses that want to know how to get more customers effectively, the highly successful entrepreneur instead recommends offering low entry prices.
For more business insights and to watch James Schramko’s newest video on price perception and customer experience, go to SuperFastBusiness.com today.