by Andrew McDermott | Featured Contributor
Apple announced the iPhone 5.
And customers were eager and excited to pre-order their phones.
Shortly afterwards Apple announced that pre-orders of their iPhone 5 had topped 2 million in just 24 hours.
And the amazing part of their story?
Not one of their customers haggled for a better price.
Apple customers were foaming at the mouth. They wanted to get their hands on the iPhone 5 and they were willing to pay full price to get it.
Which leads us to ask why customers are willing to pay full price.
Customer all-stars are happy to pay full price and they’re willing to do it for four distinct reasons.
- You’re unique
- There’s a relationship in place
- They admire you or your business
- Customers are active or engaged
1. You’re unique
When your business or product is unique, you’re one of a kind. When it’s done well, uniqueness creates scarcity. It also triggers loss aversion – customers don’t want to miss out on what you’re offering. They’re willing to do whatever it takes to get the one thing only you can provide.
2. There’s a relationship in place.
You’re looking for good relationships, the kind where there’s give and take. Good relationships are like oil. They keep things flowing smoothly and they decrease friction. Upsells, repeat sales and testimonials come easier when a good relationship is in place.
But this doesn’t automatically mean a one-to-one relationship. Your writing, content and marketing can help you develop good relationships with your customers.
3. They admire you or your business.
Customers that admire you or your work are different from other customers. These customers truly believe in your product or service. They care about your reputation and they’ll fight for you when you’re attacked.
Insult Apple or their prophet Steve Jobs and you attract a firestorm of negative attention. Need word of mouth? These customers become your evangelists, your informal sales team. They’ll work for free to spread the word about your business.
4. Customers are active or engaged.
Customers who aren’t active or engaged won’t want to pay full price. When they’re not engaged they haggle and complain. They ignore you. They’re flakey.
When customers are engaged they ask questions. They use your product often, sign-in regularly and reach out for help consistently. These customers can feel like pests but they’re the kind of pests your business desperately needs.
Those are the kinds of customers that pay full price.
Customers that are invested in your business are willing to pay full price. And at that point, it’s not just your business anymore, it’s our business.
But what does an invested customer look like?
1985 Coca Cola changed their formula. Their customers weren’t pleased.
Coca Cola started receiving letters from their customers expressing anger and deep disappointment. They received more than 400,000 calls and letters.
Customers were harsh.
One letter called then CEO, “Chief Dodo, The Coca Cola Company”. Another letter asked for the CEO’s autograph, stating that the signature of “one of the dumbest executives in American business history” would likely become valuable in the future.
Some customers felt that Coke was a fundamental part of their identity.
Would you discount that?
No customer wants to pay full price.
If there’s no uniqueness, if they’re not emotionally invested, a customer’s natural fall back is price. And it’s true, none of those customers want to pay full price.
Does this means you can’t offer discounts then?
Discounts set the wrong tone for your business, but it’s not a deal breaker. In fact, Coca Cola still discounts their products. Apple discounts their products.
But there’s a why, when and how.
Their discounts aren’t based on desperation. And it’s not based on fear. Because what they have is one of a kind.
Because Apple’s iPhone is one of a kind.
Their business and product is unique. Their customers are invested. They’ve internalized everything Apple stands for. So they’re happy to pay full price.
When your customers are invested and your business is unique price is no longer the focus. Create the right structure and your business will be filled with customers eager to pay full price.
Andrew McDermott is the co-author of Hook:Why Websites Fail to Make Money and co-founder of HooktoWin.com. His Free 5 day mini course shows entrepreneurs how to fix website failure and attract customers automatically.
One Reply to “Finding Customers That Want To Pay Full Price.”
This is a great article, Andrew.
I find that entrepreneurs and even seasoned business owners are often plagued by the concept of pricing: how to price, whether one should stick to a price, or offer discounts. What a succint way to spell it all out and answer the most important questions of how, when and why!
Keep ’em coming!