Effective Pricing What Does Its Too Expensive Really Mean?
Some thoughts on the complex and emotional issue of pricing
For many though “It’s too expensive,” almost never means, “there isn’t enough money if I think it’s worth it.”
This is often demonstrated by those who even when they are at the bottom of the poverty ladder, many people find a way to pay for the things they value i.e mobile telephone
How does its too expensive relate in the B2B sector. If an investment is going to pay for itself, “it’s too expensive,” rarely means, “the company can’t afford it.” Often, it actually means, “it’s not worth it.” This is a totally different analysis, of course. Lots of things aren’t worth it, at least to you, right now in your current circumstances.When you hear a potential customer say, “it’s too expensive,” what you’re really hearing is something quite specific. A £400 bottle of wine is too expensive to most, even to people with more than £500 in the bank. They have the cash, but they sure don’t want to spend it, not on something they think is worth less than it costs.
Not All Customers Are Equal
Not everyone will value your offering the same, so if you wait for no one to say, “it’s too expensive” before you go to market, you will never go to market. The challenge isn’t in pleasing everyone, it’s in finding the few who see the value (and thus the bargain) in what’s on offer.
Culturally, we create boundaries for what something is worth. A bottle of water from the supermarket costs £0.50 and it’s drinkable. The same water at a music festival in the summer would be seen as a bargain for ten times as much money. So obviously, we’re not discussing the ability to pay nor are we considering the absolute value of a bottle of water No, it’s about our expectation of what people like us pay for something like that. The expression that I often use is Perceived User Value PUV.