What do you do when customers complain that your prices are too high?
The issue being discussed in this article is one which arose when an entrepreneur told us that his customers were repeatedly telling that his prices were too high. Even though they had done the research and knew they were quite affordable.
“My potential clients keep arguing that my product is too expensive, but according to market research and the value additions it is reasonably priced! ”
He didn’t know what to do. This is an interesting issue because, as you know, the customer isn’t always right. The mistake this entrepreneur may have been making is that he hadn’t been using price anchoring. Price anchoring, as the name suggest anchors prices of products to certain number ranges.
A product is truly never “cheap” or “expensive”; it’s all relative. People love to compare when valuing products and having an anchor price allows them to do that.
An example of this would be - If two individuals were talking about cars and their prices, they would expect them to be in lakhs. Here, the prices expected are anchored to a certain bracket or range. Therefore, very often when customers tell you that you’re expensive. It’s because they’re comparing you to a bracket or range in their heads. It’s your job to define what that is.