Price Level Perception
Sometimes prices for Luxury creations and high-end products might be intimidating to customers.
Mr. Wu is a very successful businessman from Taiwan. He happens also to be a very important collector of Chinese ceramics. Here is his story: "When I was a student, I always admired antique Chinese porcelain. I remember that my first purchase, made with my modest salary of an engineer, was a small white cup. It was nearly 3 months of my salary and it was, indeed, quite a crazy purchase! I started my own business and things went very well. A few years ago, I decided to devote 5% of my company's profit to my private collection. Today, frankly speaking, I just buy any piece I really want. The price? As long as it is in line with the fair market value, I can afford it. I have stopped thinking about my fortune and, by the way, I don't really know how much money I have. I miss the time and decision making excitement when I needed to think about each purchase and consider it compared to my yearly salary!"
A high-priced item, might seem high for a sales advisor, and probably is for many of us. Yet it might not seem high for someone who is living in a world that is used to that level of price. Your customer is probably not intimidated by the price. You do not need to worry about this point.
A price level is also related to the customer’s wealth and capacity to finance it. For most of us, there is no such issue when we need to buy a pair of sneakers. We would focus on the brand, the model, the color and newness of what we are looking at. Unfortunately, for many very low income or no income persons, it is still the price that matters. It is the same with affluent customers. Even if the price looks high to you, it might be a relatively low price for your customer. It all depends on the base for comparison. For Mr. Wu, who does not know the exact amount of his fortune, the price is just a number and what really counts for him is what he gets in exchange for that number. He basically knows that the price is still reasonable compared to his total assets and he will not have problem in spending to purchase the item he wants.
Therefore, sales advisors have to place themselves at the level of their customers and see prices from another angle. The most important factor is not the price level but the fundamental question: is it worth buying? Customers always have the money for the product they seek to purchase. Otherwise, they would not be looking at it!