Will I? Which one? There are two questions your customers ask themselves and answer every time they deliberate about a purchase. Will I buy a product (or service) in this category? If so, which one will I buy? These two questions are important to consider when when it comes to pricing products and services.
If someone is in the market to buy a new car (Will I? Yes), then she is probably looking at her options (Which one?), if she is not in the market for a new car (Will I? No), then she probably isn't shopping around. Before someone chooses which car to buy (Which one?), she first must decide that she wants a new car (Will I? Yes).
Will I?
Before making a purchase, customers must decide to purchase a product in your product category. In other words, they have to choose to allocate money from their limited income or budget to your industry.
Pricing in relatively powerless at convincing someone to purchase a product in specific category. Pricing is much more powerful when influencing consumer choice within a category (the "Which one?" decision). Buyers typically require very large price changes to influence a change in their budget, but relatively small price changes to influence their product choice behavior.
Which One?
Customers make choices. With a few exceptions, they choose between relatively similar offerings every time they make a purchase. They choose which car to buy, which computer to purchase, which laundromat to frequent, which airline to fly, which Realtor to use, and which restaurant to visit. B2B (business to business) buyers are even more deliberate when choosing their suppliers.
Potential customers trade of perceived attributes with price price. Because the features of the alternatives are often similar, small differences in price can swing a purchase decision. In the world of pricing, this is where the leverage is. Not only is the "Which one?" decision most commonly the last decision the customer makes it; it is also the decision where price has the biggest influence.
If someone is in the market to buy a new car (Will I? Yes), then she is probably looking at her options (Which one?), if she is not in the market for a new car (Will I? No), then she probably isn't shopping around. Before someone chooses which car to buy (Which one?), she first must decide that she wants a new car (Will I? Yes).
Will I?
Before making a purchase, customers must decide to purchase a product in your product category. In other words, they have to choose to allocate money from their limited income or budget to your industry.
Pricing in relatively powerless at convincing someone to purchase a product in specific category. Pricing is much more powerful when influencing consumer choice within a category (the "Which one?" decision). Buyers typically require very large price changes to influence a change in their budget, but relatively small price changes to influence their product choice behavior.
Which One?
Customers make choices. With a few exceptions, they choose between relatively similar offerings every time they make a purchase. They choose which car to buy, which computer to purchase, which laundromat to frequent, which airline to fly, which Realtor to use, and which restaurant to visit. B2B (business to business) buyers are even more deliberate when choosing their suppliers.
Potential customers trade of perceived attributes with price price. Because the features of the alternatives are often similar, small differences in price can swing a purchase decision. In the world of pricing, this is where the leverage is. Not only is the "Which one?" decision most commonly the last decision the customer makes it; it is also the decision where price has the biggest influence.
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