When you want to show how filthy rich and successful you are, details matter. That’s why you need to have gold-plated staples, sold in packs of 24 for $175. Or how about a Tiffany tennis-ball-canister … for $1,500? And if you really want to show off on the courts, you can hydrate yourself with a $60,000 bottle of Icelandic glacier water that has been mixed with five milligrams of real gold dust. ALL of these are real products that people really buy.
Begs the question, how does someone get away with what is clearly a ridiculous fee for such “ordinary” items? Hint: it’s the secret to selling ALL premium-priced goods and services. It’s NOT about the thing, but what owning the thing gives you. What most people don’t understand is that it MUST be “ridiculously” expensive to increase its appeal. That’s part of what they are buying – the story they can tell, the exclusivity and the bragging rights. There is a global belief that quality and high price go together – so if you are going to SAY you’re the “top quality” IT firm above all your competitors, you must charge more for the story to ring true.
How does someone get away with what is clearly a ridiculous fee for such “ordinary” items? Hint: it’s the secret to selling ALL premium-priced goods and services. It’s NOT about the thing, but what owning the thing gives you.
Example: Hästens is a Swedish bed maker that sells a custom, made-to-order mattress for roughly $150,000. It features pure steel springs, filled with genuine horsehair and cotton, each one stuffed, stitched and tufted by hand. You can’t have the romanticized story without having the premium pricing. Is it for everyone? Hell no … but that’s the POINT, isn’t it? YES, it has to be good … but is it $1,000-difference “good”? Maybe.
Everyone has a price point they won’t cross
And yes, everyone has a price line they won’t cross for any given item. As a general rule, I won’t spend more than $100 on a bottle of wine … and I really like good red wine. But there’s a buyer for every price, PROVIDED you know how to present it. For example, a bottle of Château Margaux from 1875 is known to be the single most expensive bottle of wine to ever be sold, at $500,000; that was mostly because it belonged to a wine collection owned by Thomas Jefferson. You might get me to push the limit of $100 per bottle if there was something truly special about it … if you link it to a story or to an experience. At dinner with friends, I once bought a $500 bottle of wine because it was a rare, exclusive vintage that the restaurant had only one bottle of. It came in a velvet bag and was served with white gloves with a flourish, which brings me to a very important point about all of this…
You cannot charge premium prices for your IT services and show up in a brown paper bag. YOU must dress impeccably in the meeting and have a personal assistant call to confirm, follow up, etc. You must have marketing materials that position you properly – a book, an interview on a CD, a really well-done Shock-And-Awe box that is not just some self-printed brochures full of fluff rattling around in a box. You must be supremely confident in the meeting and appear to be organized and well prepared, not uncertain and timid. And finally, make sure you sell only to people who put competence and quality higher on the list than price. You can do this by emphasizing it in all your marketing materials and collateral so that before they meet with you, they’re not shocked and you’re not wasting your time. You also need to select companies that CAN write the check when you are developing your MSP marketing strategy. If you don’t know THIS or DO these things, you’ll never be able push your prices up to their highest practical limits.
Photo: Olivier Le Moal / Shutterstock.