Did you know, a vast majority of Americans are under-insured? Did you know that the main reason they give for this is that they cannot afford to buy insurance? We would think that something as important as insurance would be a high priority purchase, even a necessity, but clearly, it isn’t. Why is this? This is because most insurance brands haven’t been able to communicate the urgency and the value of their products to their consumers. They haven’t been able to make people look away from the price point long enough to really examine other aspects of insurance that make it so valuable.
Bargain hunters to value seekers.
So how do you make people value your brand above the amount they would need to pay? The simple answer is you make them look beyond the price point. In the case of insurance, not enough companies have been able to convince people that their future financial security and the wellbeing of their families are more important than the premiums they pay today. They weren’t able to convey the urgency, the necessity of this purchase right now. To be fair it is always difficult to get people to make a purchase that may or may not have a benefit at some later, unforeseen point. So insurance is notoriously difficult to sell at the best of times, but the principle applies to other products as well.
You have to be able to make people understand that the dollar cost is just one component of the purchase they make. Your brand has to communicate effectively the other aspects of the product such as its uniqueness, its features, its utility, and what makes it special. They have to understand how your brand promises them a better future: more convenience, greater security, simplifying life, increased status… These have to become more important considerations than the price they pay.
Becoming valuable to your ideal individuals.
Consider this statistic: increasing the price of a product by 1% can increase profits by up to 10-12% for the average business. How is that even possible! This happens when your product pricing hits that sweet spot: not so high as to be out of reach, but high enough to be desirable. Broadly, branding experts use four strategies to shift focus away from price and towards other reasons that influence choice and buying behavior. At this point, the price becomes secondary and even irrelevant in contrast to how much they perceive a need for your particular product.
The first brand strategy is to demonstrate how your product is the solution to a specific problem. They have to see why they don’t just want but also need that product. You have to nudge them along; rather like a good friend would remind you to see a doctor about something. A great example of giving them a solution to a problem is pockets on a woman’s dress. Market that dress not just as an attractive item of clothing, but as the solution to the problem of having to carry around a phone or a wallet in the hand. The next strategy is the bulk value proposition – would you rather pay for Netflix each month or get an attractive discount on a yearly package? Most choose the latter. By sacrificing a very small amount, Netflix bought over customer loyalty for a year! Check out this episode of Inspiration to Millions to know about other brand strategies that similarly work to overcome the price barrier to becoming a part of your brand community. Don’t miss it!