Positioning outcomes: premium prices

Would your customers bolt if you tripled your prices?

Chances are that some of them would — but not all of them. Some of your customers would be happy to pay triple for your product. If you position your product so you only have the type of customer who would be happy to pay triple, then you can increase your prices without losing customers.

When you position your product well it’s often possible to charge premium prices — even more than wider-known options that aren’t as specifically targeted towards a specific user. On the flip side, price pressure is generally a sign of bad positioning, because it means that customers can’t tell why you’re any different from other options and therefore don’t want to pay more than the cheapest comparable option.

When customers percieve you as the only option that provides the specific value that you provide — and you are talking exclusively with customers for whom that value is extremely important — the price conversation is totally different. You won’t be compared to the cheapest, crappiest potential competitor, because customers will perceive you as having no competitors.

As a result, they are willing to pay more. Generally it also becomes easier to land new customers, so you’re both increasing the revenue from each customer while expanding the customer base.

All because you’ve given your product the right context and found the people who will get the most value out of it.