Six steps to premium pricing without the yuk factor

I’m not very big on Valentine’s day. Are you?  Back in the day I loved it. Back when there was a chance of a surprise Valentine, and all that, But now? Nah. I’m married with four children and there are no surprises like that!

Image (delactabledelicousnessblog)

Yes, flowers would be nice but I don’t need to pay extra for flowers on 14th February when I can get them at half the price a week later. I’m not Scrooge, I’m just not that bothered.

But I have absolutely no problem with the fact that Florists (and their suppliers) charge handsomely for Valentines Day flowers. It’s business and it makes sense. Let’s say a bunch of roses normally retails at $50, florists get to charge $90 on Valentines Day because they charge $50 for the roses and an extra $40 for making them available to you ON THE DAY.

Then it’s your choice. Are you happy to pay an extra $40 for the privilege of having Roses on Valentine’s Day, or not?

This sort of pricing isn’t limited to Valentine’s Day. It happens regularly. For all sorts of reasons we pay a little (or big!) premium for getting something the way we want it, when we want it.

But, but, but….. back in small business land we are often not very good at doing it the other way. We pay premiums but we don’t charge premiums. So on that note, here are my six tips to help you charge your version of the Valentine’s Day premium.

 

1. Make a list of the occasions when customers could ask you to do something a little out of the ordinary. So this may be when they ask you to do a rush job, deliver to an out-of-the-way place, customise something that’s not normally bespoke, or squeeze them in when you are already overbooked….

 

2. Make another list of the times when you are super-busy and have to hire help or work extraordinary hours to get everything done. Times like Christmas if you sell toys, Spring if you’re in the Wedding business or tax return time if you’re an accountant.

 

3. For both lists think about how much extra you could charge your clients for providing them with the special service in Step 1 or the special time in Step 2. Your extra pricing needn’t be big. While an extra dollar here or there can make a big difference to you it is often not a big deal for the customer.

 

4. Remember that this isn’t about ripping people off  – it’s about giving your customers a choice. They can select the standard service/time and pay the normal price or pick the special service/time and pay the extra. It’s that simple.

 

5. Once you’ve worked out your premium for each special service/time write up a new price list!

 

6. Now you’re ready to give it a go. Take a deep breath and try it out on the next three new customers that qualify for the slightly higher price. If you’re wondering how to actually mention it to the customer try just saying something like ‘we have to charge a little more for (this service) because ()’. My guess is that you’ll find that your customers will understand. And if that’s the case, go forth and do it forever onwards!

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