Your buyers differ in their ability and their willingness to pay for your product or service. So why are you charging every buyer the same price?
Doing so is costing you sales in and profits in two ways. First, you’re charging too little to buyers who are willing and able to pay more. Second, you’re charging too much to buyers who are willing to pay more than your product’s cost to you, but not as much as your asking price.
Imagine, for example, a seller who purchases doodads* from a wholesaler for $5 each and re-sells them for $10. Some buyers would be willing to pay more than $10 but don’t have to. Other buyers would be willing to pay more than $5, but not as much as $10.
If, for example, our seller offers doodads for two different prices, say $12 and $9, why would any buyer willing pay more than $9? The answer, of course, is he or she wouldn’t — not for the same exact product.
If you want buyers with greater willingness and ability to spend more with you, you must offer them a more valuable, higher-priced alternative. If you don’t want to lose buyers with less willingness and ability, offer them a lower-priced, lesser valuable alternative to your base product or service.
Giving your buyers price options is an effective way to increase your sales without hurting your profits. Just make sure the differences in price reflect the differences in value buyers will get.
Read more in Eight ways to get buyers to reveal how much they’re willing to pay.
* doodad: an unnamed thing. Also known as a doodah in other parts of the English-speaking world.