What Your Price Says About You As a Luxury Business
Get it wrong and you'll fill your client base with people who’ll haggle and quibble
Pour someone a glass of wine, tell them it’s the expensive one, then pour them the exact same wine and tell them it’s the cheap one.
They’ll enjoy the first glass more. Not pretend to, actually enjoy it more.
There’s a rather well-known bit of research where they ran this in a brain scanner, identical wine, different price tags, and the reward parts of the brain lit up, there was more activity for the expensive one. The wine hadn’t changed, only the number had.
Which is the whole game with pricing, and most people have it backwards.
They treat the price as a description of the thing, an honest little summary of what went into it. The client doesn’t read it that way at all. The client reads the price as evidence of what the thing actually is.
It’s called the price-quality heuristic, and it does the most work exactly where you’d least want it to. When quality is hard to judge, and in luxury it almost always is, you can’t assess the stitching or the provenance or the forty hours of someone’s life from across a counter, so the brain takes the shortcut and lets the price stand in for all of it. The expensive thing must be the better thing.
So your price isn’t just sitting there on a label. It’s positioning you whether you meant it to or not, and it’s doing it before the client has touched a thing.
Set it too low and you haven’t been generous, you’ve told the client that the product isn’t as amazing as you’re suggesting. You’ve filled your client base with people who’ll haggle, quibble and treat the whole thing as a transaction.
The dangerous bit isn’t pricing too high though, it’s pricing into the gap. Too expensive to be a casual treat and too cheap to be a statement, so the number contradicts everything else you’re saying and the client can’t put you in a neat box, and clients love a box.
Your price chooses your customer long before your product gets a look in.
Watch the full video on the Luxury Academy Newsletter YouTube channel.
See you in the next one
Paul
Visit the Luxury Academy website at https://www.luxuryacademy.co.uk/