Last week, I talked about not undervaluing yourself by pricing your products and services too low. I suggested that you set your prices at or near the high end of the market. Fear is a natural reaction. I know – I’ve been there myself.

Here are five proven steps you can take to increase the perceived value of your offering – and your customers willingness to pay more for it.

1. Demonstrate the return on their investment. If your service’s primary benefit is that the customer will either save money or make money, this is an excellent argument to use. You need to show your prospect the expected outcome in terms of cost savings or additional revenue. Then show them how much more they’re going to make or save compared to what they pay you. To take this a step further, set your fee as a percentage of what is saved or made. Now you not only show the prospect the ROI, you essentially guarantee it.
2. Tie to price to quality. The belief that price and quality are related is widely held. If you’re selling a product, show that there are higher-quality components that cost more and therefore perform better, longer, faster, etc. If it’s a service, show that the people delivering that service are more skilled and/or more experienced than cheaper alternatives. After all, who would you rather operate on your heart – the doctor who charges $99 or the one who wants $99,000? Obviously, don’t use this “you get what you pay for” argument to justify higher prices if you don’t actually have a higher level of quality, skill, experience, etc.
3. Sell them a bundle. It’s no secret that the easier it is to compare the offerings of two different providers, the more price driven the purchase decision will be. Make it harder to directly compare. For example, you may charge more for your product but also includes additional accessories or extended warranty or service plan that your competitors charge extra for. If you’re offering a service, include a collection of ancillary services that your competitors are charging separately for – or not offering at all.
4. Provide proof. Testimonials can be the key to getting people to pay a higher price. The testimonials are providing social proof to your prospect that your product or service was worth the price. This is particularly important in for a service, where the quality can’t usually be evaluated prior to purchase.
5. Change the frame of reference. Don’t focus on comparing your product to your competitors. Instead, create an even more expensive offering as an alternative. Including the much more expensive option will change the prospect’s perception of the main product’s cost. The idea here isn’t that you expect to sell a ton – or even any – of your super expensive product or service. For example, if you are selling a service for $500, maybe you create a version of the service that you price at $5,000. When you sell to the prospect, talk about making a decision between the $5,000 and $500 versions – not about between your $500 version and a competitor. It goes without saying that the very expensive version better be something you are willing and able to deliver should someone decide they want it. Using this tactic to create a dummy product that you can’t deliver is, at a minimum, unethical.

Always keep in mind when setting your price, that your value in the customer’s mind will be directly tied to price. If you try to be the low-cost provider, you will be seen as cheap. This, of course, makes it very difficult to raise your prices over time. How successful do you think Wal-Mart would be if they tried to sell luxury goods at a premium price?

To your success,