The price you put on a product or service is largely inconsequential. The real deal is the perception of the customers on the specific amount. This is where the social science of pricing moves into physics.
Yes, two salespeople can introduce the same product to the same customers, and each of the customers will come out with different perceptions of the product price.
In other words, the best Pricing Power is creating perception which will move the customers, without necessarily adjusting the actual price of the product. Yes, how do you make a product seem “cheap” by not actually reducing the actual price but through perception? But note: it goes beyond being “cheap” to affordability since something could be cheap and still not affordable.
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In the next Tekedia Mini-MBA, starting Sept 2024, I will teach a course on pricing, and introduce a new pricing model, for those making physical things in Nigeria, and that model will help companies attain better equilibrium on scaling and profitability. A Tekedia Capital portfolio company has deployed this pricing model to great results; we will share perspectives.
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