Or: Making customers think your prices are a steal (without discounts)
If an item is truly out of your target’s price range, there’s not much to be done. You can’t sell a $100 toaster to a person with only 20 bucks in their pocket.
But we can position your product in a way that overcomes the “too-much” sensor in the brains of people who do have the cash to buy your products.
One way to sell high-dollar items is to make them look like a steal in comparison. And you can easily make your product look like a bargain by putting a more expensive option next to it.
This is marketing 101 stuff. And it’s actually a documented phenomenon called the contrast effect. There’s a famous study about it that was published in the Journal of Marketing Research. It goes like this:
Nobody was buying Williams-Sonoma’s $275 bread maker … until they put a $429 one right next to it. Basically, the same product, just WAY more expensive. Guess what happened?
Sales on the $275 bread maker doubled. Which is awesome. Williams-Sonoma sells more breadmakers at $275... which is what they wanted to do anyway. And if anyone was fool enough to buy Liberace’s Golden Bread Maker, hey. That’s another 400 clams in their pocket. There’s basically no downside here.
So how might this apply to your sales?
If you’re struggling to sell a $1000 service, try introducing a more expensive luxury option to sit next to it. Don’t worry if nobody buys the ultra-luxe version, that’s not why it's there. You’re simply using the expensive item to make the $1000 price tag more palatable.
Another strategy is something called price anchoring. It’s a tactic that I’m sure you’ve experienced firsthand… for example, a fundraiser calls and asks for a huge donation. Maybe $500. You obviously decline (which, honestly, they’re expecting you to).
But the reason they ask for such a high number up front is to make their next offer sound very reasonable… just $50. That’s way better, right? If they let the donor decide how much to give, they’d get a trickle of $5 and $10 donations. But by leading with a high number, we now think a measly $50 is a bargain and they see higher profits come in.
You can try this tactic by reordering your store to show expensive items first. After a $2000 service, $1000 looks like a steal. Have all your same products, just sort them from top dollar to bottom.
Notice that none of this involved cutting your prices or discounting products. You’re simply creating a perception of value by arranging your products in a more appealing way.