Pricing: Be a luxury not the lowest option

Pricing: Be a luxury not the lowest option

‍

Now I know that we typically only focus on digital marketing here, but something that I have had so many clients ask me about is their pricing and this does tie into marketing and positioning.

Something that irks me beyond belief is when a client tries to compete with a competitor, and their only strategy is that they’re cheaper. An old quote that I love to share with my clients, “Competing on price is a race to the bottom”. When your only redeeming quality is that you’re cheaper than your competitors, all you're doing is taking out your own bottom line, taking food off your table, and working harder than your competitors. If your competitors can charge more than you and they’re still in business, their cost obviously isn’t keeping customers from coming to them.

The pricing strategy that I have always followed while running location based entertainment businesses is to position yourself as a luxury. If your competitors charge $30, don’t go out and charge $3,000, I’m not talking about Lamborghini vs Toyota pricing, but you can charge a bit more to set yourself out and give that perceived value of higher quality. 

‍

In the Location Based Entertainment Industry, we are chasing after people's hard earned dollars and their limited free time, they want to treat themselves to the best experience. Psychologically speaking, people tend to equate higher price with better experience, so when these customers have limited time off to spare, they will want to make sure they’re not wasting it, they’re fine with spending the extra money for the higher quality options if they think it will be a better experience for them. Think grocery shopping at Walmart vs Whole Foods, when people are looking for high quality and want to treat themselves they’ll go to Whole Foods, even though they could get very comparable options at Walmart nowadays. Be the Whole Foods of entertainment in your city, it’s a lot more fun to be worried about making too much money than not enough.

‍

Now a big asterisk on this, if you want to position yourself as the higher quality luxury experience you have to make sure you actually are, or at least are comparable. If you market yourself as the highest quality option in the city but you aren’t you won’t tend to get a ton of repeat customers. But if you meet their expectations they’ll be loyal and tell their friends, and the people who are willing to spend the extra for high quality are the regular customers you want. So with the extra money you will be making by not undercutting your competitors, use some of it to make those improvements to set yourself apart and give the perceived value that you are worth the extra.