All of us in business know the experience of receiving price complaints. And they can dent our confidence. It could be a raised eyebrow, a potential customer who simply walks away, or maybe a full-blown whinge. But the root cause of price complaints is nearly always around value: the customer doesn’t see the value in what you are offering. Whether it’s an expensive Michelin star meal or my attempt at a plum crumble, potential customers need to see that they’re getting something they value.
Price complaints are about value
And that doesn’t necessarily mean your products or services are over-priced. It could be that this particular customer just happens not to value whatever it is that you sell. He may even give voice to his feelings in a way that assumes everyone else will share his low opinion of the value. But of course that’s nonsense. For me there’s no value in tickets for a Formula 1 Grand Prix (unless I could see an opportunity to sell them on) but opera tickets have a lot of value; other people would see the value very differently.
A response to the price whingers
So when you’re next feeling bruised by a price complaint there’s a brilliant article by the restaurant critic Jay Rayner (no relation, sadly) that I’d recommend you read Oi you! Yes you! The one whingeing about the cost of the restaurants I review.
Although he’s writing about restaurants, it’s all good stuff and equally applicable to other businesses. I particularly like Jay’s penultimate paragraph:
Let’s be clear. Some restaurants do take the piss money wise. And when they do, I say so. But there is a great difference between price and value. I have paid £400 of my own money for a meal that I thought was worth it. I purchased memories. That may not be the kind of memories you want but they are what I want. But I have also spent £20 on a meal that I thought was a rip off and I have said so. The issue is never the spending of money on food in restaurants. It’s always what that money buys.
You might want to apply that to your business
- Some businesses do take the piss money wise – and you may get away with it, but if you don’t provide the value that your customers expect you might get scathing reviews like this.
- But there’s a great difference between price and value – customers care less about price and more about the value of what they are purchasing.
- I purchased memories – your customers may not be buying memories but are you selling what your ideal customer wants to buy?
- The issue is never the spending of money on whatever it is that your business sells. It’s always what that money buys.
Looking for more?
One of the two big reasons why people think price is too high is because there isn’t enough value.
As part of our Pricing Training programme we will look together at ways to overcome this problem and help you build your value.
You can find out more about Power Pricing: Pricing for maximum profit here.