44 The Financial Times Guide to Business Development
14. Price for prestige
Why do people buy designer handbags at £599 or more from high-end
designer shops when they can get a perfectly usable bag at £15.99 or less
from regular high street shops?
Will the more expensive bags last a hundred times longer, hold more or be
used any differently in terms of the ‘junk’ that is put into them? The honest
and rational answer is ‘no’. The same can be said for suits, cars, seats on
ights, hotel rooms and a massive range of other goods and services.
Yet despite this, it is an absolute fact that you should accept, embrace and
use that a percentage of people will not only be prepared to buy at the very
top end but will actively go out of their way to do so . . . while still seeking
out the best buys and discounts at the premium end. The big question is,
why? Though of course quality is a factor, it really isn’t just about quality at
all. Here is the honest answer and you should factor this into your pricing
strategy when looking at business development.
People don’t always buy what they ‘need’, they buy what they ‘want’ and that desire
is driven and fuelled by what makes them ‘feel’ good and gives them a sense of
status and signicance.
With that in mind, an important question for you to explore is: ‘What is
there in your product or service range that you can package and sell at the
very high-end premium level?’ If you don’t have anything at the moment,
actively sit down right now and work out what you could possibly create
that lls that role. Then test by implementation until you have some-
thing that works. You will then have something that is high protability,
enhances your image, attracts loyal followers of your brand and inuences
others to ‘want’ it too.
Remember, when it comes to promoting and communicating your top end
item or service, don’t hold back. Potential customers will expect it to be
expensive . . . don’t let them down!
You will need, however, to observe certain basic rules to strengthen your
offering. I call this the ELVF approach. The more of these you can com-
municate the better:
E = Exclusivity. Customers or clients need to feel they are getting
something that perhaps others can’t get. For example, I presented
a big business development seminar some years ago to the legal
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