How to make expensive products a luxury instead of a rip-off?
The notion of luxury is one that was crafted by businesses and shaped by the consumers that endorsed it. What is the difference between an expensive luxury product and a rip-off? Some would argue quality… others would support brand awareness…and there are those that are skeptical and see no difference. Only the business itself truly knows. In previous articles, we discussed promoting luxury products and the different marketing strategies it involves. Today, we are going to look at what defines those products as high-end ones by exploring the ways in which a business can make expensive products a luxury instead of a rip-off.
9 ways to make expensive products a luxury instead of a rip-off?
Although a common occurrence in niches, very few businesses are interested in battling over the price of their products. One of the worst things for a marketer is for a product they promote to get the label of “cheap” or “expensive”. The price of the product should never play a vital role in marketing it. Instead, the focus should always be on the value that the product offers to buyers.
We live in a monetary world where price and affordability do play an essential role. Therefore, companies need to establish a price for the products/services they are selling. But simply because your product is viewed as expensive does not make it overpriced or a rip-off. So, you don’t need to rush to drop the prices or run discounts on it to stay competitive. Instead, there are much better ways to present it to your target audience and maintain your conversion rate with the standard price of the product.
1. Change the consumer’s perspective
People get that sense of shock when they see a seemingly ordinary, everyday product with an overwhelming price tag attached to it. So, their first instinct is to judge it because they know of cheaper products that have similar characteristics. So, to convince them that your expensive product is not a rip-off, give them a different perspective. Introduce an even more expensive product next to it and raise the bar. By doing so, you gain better control of the narrative – bringing your original product closer to that middle ground in terms of price.
It all comes down to tapping into the behavior of your customers – knowing your audience and how they look at prices. By implementing the contrast effect, you are able to change the point of view of customers. It makes the prices of your primary product appear much smaller and more reasonable.
Use price anchoring to boost the presentation
You should understand that the goal here is not to sell the new expensive product you present. Although you might find a limited audience for it, your focus should be on the initial product that was labeled as too expensive by customers. By introducing the new and overwhelmingly more expensive product next to it, you make it more affordable in the eyes of consumers. And positioning plays a crucial role here, which is why you need price anchoring.
By leading your menu with the most expensive product, you set the expectations for what is to follow. When companies start with the cheapest products, customers grow reluctant with each product that follows. And so, by setting the expectations high with the most expensive product, you give customers a decision-making process that draws them in with the lower prices they see. This is where the skills of professional web design agencies can really stand out – in helping you portray your products in the most engaging manner.
2. Break the price down into a plan
This is a technique that marketers have been using since the 80s. It all comes down to content and how you present the price of your products. The effect of asking giving a full price for your product can put a noodle in the throats of your customers, taking them to stress over finances, etc. On the other hand, by simply offering them a “pricing plan” for your product, you can make expensive products a luxury that is absolutely affordable. And all it takes is the right choice of words such as “for just $59 a month” or “for a mere $2 a day”.
The price of your product remains unchanged, but in the eyes of customers, it is a luxury deal instead of a rip-off. And that is all that matters at the end of the day. It is also an approach that companies have been profiting off of for decades – a simple ‘divide & conquer’ approach to pricing expensive products.
3. Divide & compare
Here, we have a combination of the afore-mentioned two tactics. By dividing the price of your product and placing it next to a daily expense such as drinking a latte or buying a sandwich – you give customers that image of your product being as affordable as any day-to-day luxury. Why take this approach? Because it is easier for consumers to visualize eating a mediocre sandwich than $3.50.
The only important thing to remember about this approach is to compare the cost of your expensive product with the price of something that is an unnecessary indulgence. People don’t need that crummy coffee or a pack of cigarettes but they still waste money on it freely. When it comes to a B2B marketing approach, it comes down to targeting all those irritating costs such as water for the cooler or re-stocking the wending machine, etc.
4. Give the story behind the product
Some marketers use a model to shine a light on the true value of their brand through a story of the work that went into building it. The model is known as a Brand Identity Prism and is applicable to specific products just as much as it is to the brand as a whole. The difference is that with products, copywriters will focus on the resources and work that were invested in the creation of the product. By providing customers with this value prism, companies justify the value and price of the product to potential customers, making the notion of a rip-off less plausible.
For example, let’s say that you are selling a piece of software. Rather than putting a price tag and a list of benefits on it, you might consider noting the following information:
- The number of specialists that worked on creating the software.
- The degrees and specialties of each of those specialists.
- Years of experience and research that led to the idea for the software.
- The time frame it took to create the software.
- Certifications and awards that the software received.
- The financial value of the software in question, etc.
It all about providing potential customers with a strong foundation to solidify the price of the products you are selling. Think of each piece of information as a feature that justifies one small part of the price. By doing so, you will be able to make expensive products a luxury instead of a rip-off.
5. Provide a calculator to emphasize the payoff
When you are selling expensive products, people automatically start doing calculations in their heads. “If I were to buy this, would I see it pay off? How long would it take to see a profit from this investment?”. These are just two of the countless questions and internal struggles that people have when faced with luxury products. So, why not make it simpler for them by providing them with a calculator on your website?
- Take digital marketing services as an example. As a digital marketing agency, we need to guide potential clients through short-term and long-term calculations when it comes to the services we provide them. We need to justify the price of the services we offer in a realistic way that they will be able to visualize. So, if we come up with a 6-month marketing strategy for a total of $30,000 ($5,000 per month) – we would need to provide them with an actual calculation of the pay-off. If they manage to earn an additional $20,000 per month, that would make our monthly fee look much more reasonable. And if the revenue continues to grow long-term, the monthly fee will only seem more affordable.
An actual on-page calculator that the visitor fills out could make the story – and, more importantly, the money they’ll save – much more real for your visitor.
6. Customize the price format
Reports have shown that restaurants and bars without the dollar sign tend to attract more revenue. When people don’t see the dollar sign, they give less thought to the money they are spending, and are likely to spend more. Another useful tip to try here is to reduce the font of the sale price of a product.
Psychologically, the logic is simple – big prices are big while small prices are viewed as small. Prices written in a smaller typeface are less threatening to customers, making expensive products appear more affordable. And this is a technique that is commonly used on eCommerce websites.
Never underestimate how charm-pricing can make expensive products a luxury instead of a rip-off
One of the oldest tricks in the sales book – deducting that single penny or dollar from the price to make it appear less expensive. As ridiculous as it might sound to some, offering a product for $89.99 instead of $90 does make a difference. In the minds of consumers, it conveys the message that the product is expensive but not as expensive as it could be.
7. Introduce tangibility to your product
With the notion of digitalization of services and even products, it can be easy to lose track of the physical aspect of purchases. However, customers need to be able to feel and hold something that they are purchasing. It is an integrated need of consumerism – expecting a tangible item for the money you are paying. Whether you are selling a piece of software, car insurance, or plastic surgery – you need to provide customers with something they can actually hold or create an image of holding. And this is particularly important for luxury products.
8. Present your prices as a new standard
One of the first thoughts that we mentioned here was raising the bar to provide customers with that middle ground when it comes to the price of your product. Why would a man want to spend $50 on a haircut? Why would a company want to spend $10.000 on a website? Well, if they see it as regularly-priced, why not? And to make it a standard, all you need is social proof of others doing the same:
Testimonials, number of users, ratings – these are all useful indicators that send a message that there are plenty of customers that are willing to pay the price for your product. And the more social proof you have, the less expensive your product appears to others doubting its value. For modern consumers, it’s all about having others reaffirm the credibility of your product and its worth.
9. Create a luxury showroom for your product
Selling expensive products in a retail store or on a website that looks and feels cheap is not something that consumers do. If you want to attract high-end customers for your products, you need to make the environment presentable. Whether we are discussing a retail store or an online one, people need to feel that they are in fact dealing with a professional and well-established business. And that is one of the basic principles on how to make expensive products a luxury instead of a rip-off.