The profit you make comes from the premium you can charge for your stuff. The price reflects this premium. You can increase the price if you increase the value. Remember, the value is determined by the customer and not by you or any other provider. The beauty of selling to more discerning or higher-value customers is that they appreciate and are willing to pay for quality, which means you provide more value for the same work. There is a well-known marketing strategy that emphasizes a premium or distinguished version of an item over the standard or normal version. Often, the difference lies in the naming and marketing, not in the product at all. This includes targeting a specific solution as a premium product created for a specific audience. For instance, if you offer personalized consulting services instead of generic advice, you can charge more because clients see greater value in your expertise.
As an example, I offered a good solution to a client at a very discounted price. They needed the solution, and I needed a good reference, so I thought it was a win for both parties, and it should be an easy deal. The client went with a different provider who gave them the same solution, slightly more targeted packaging, and a price more than 20 times my offer. When asked, they perceived the higher-priced solution must be of greater value because of the significant cost differences.
Knowing your target audience and the price range they will pay for your services will help you determine the actual value of your solution.
Need help finding your target audience?
The money makers or venture capitalists pick companies and founders with proven experience relative to the industry they want to target. That means if you are looking for new markets or a targeted audience, start with the industry you know the most, even if you are currently looking for a way out of it.
Everyone has “some” inside knowledge due to family, friends, past jobs, or favorite hobbies. If that is no help, pick the narrowest target to go after first so you can spend time learning as much as you can about that audience while you tailor your offer to them. Start with what you know or can easily learn from those you have access to. You can explore more or complete a detailed customer analysis once you have a customer base to survey. This will help you learn when you can go and who will pay the most or see the most value from your offering.
Do you want to sell a high volume to the masses or a smaller volume to higher-value targets for the same results? Can you compete in the high-volume space for a long time, or can you customize and focus on a small audience that will bring you greater value and longer loyalty? Choose and win.
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