As business owners, it’s natural for us to question our pricing from time to time. Are we overcharging? Undercharging? How is an event pro to know exactly how much they should charge for their services? If you’re interested in raising your fee, the good news is that you likely can. You just need to understand one important point: Pricing isn’t always about the actual cost, but instead, it is based on the perceived value of a product or service.
Photo courtesy Pharris Photos
Let’s explore an interesting story that helps to paint this picture.
In 2018, Payless ShoeSource—an international bargain shoe brand—decided to do a social experiment to see if people were willing to pay more for an item if they believed the value was there. To do this, they rented out a storefront in a luxury mall in Los Angeles that used to be home to Armani. The Payless team then filled the store with a range of their own shoes—all priced between $19.99 and $39.99—and marked them up by 1,800%. Each pair of budget shoes were being sold for hundreds of dollar.
They named the store Palessi Shoes, created a website, and invited over 60 influencers to come visit the store for its opening. You wouldn’t believe what happened when they showed up.
Within the first few hours of being open, Palessi Shoes had already made $3,000 in sales. The influencers were loving the shoes and mentioning how sophisticated the styles were compared to other brands. Yet, not one shoe in the store was a designer shoe. They all cost less than $40.
Payless revealed the scheme to the influencers—who were understandably embarrassed—and refunded all of their purchases, but only after creating a powerful advertising opportunity for their brand.
So, how does this relate to you and your event business?
The takeaway lesson is that the features of a product or service aren’t a selling point; rather, people will pay premium for an extraordinary experience. You may not be targeting influencers, but if you want to charge luxury prices, you need to create a luxury experience that matches the expectations set by the price point.
To refine your client experience, you have to dig deep into your target market and identify the factors that will persuade your ideal clients to sign on the dotted line. What can you offer that will provide your clients with that dream experience they’d happily pay the (luxury) price for?
Photo courtesy Pharris Photos
Consider what your ideal clients are drawn to outside of the wedding industry. What brands do they associate with? How do they make their purchasing decisions? Perhaps they like the idea of exclusivity and enjoy feeling special. Maybe it’s the careful packaging and the painstaking details included in a product. Others may be swayed by your core values, like sustainability or inclusivity. Put yourself in the mindset of your dream client and seek out ways to enhance your brand experience to meet their expectations.
If you find yourself stuck, consider the factors that influence your own purchasing decisions. Are you on Team Apple because of the user-friendly interface and sleek packaging? Or do you prefer Microsoft for its versatility and practicality?
Every product or service that exists appeals to a certain part of the market, so you need to position your own brand to appeal to the desires of your own ideal client. Once your client experience is up to par and can be considered as ‘luxury,’ there shouldn’t be anything holding you back from charging more based on the perceived value of your products or services.