Sales strategies 02: Know your audience
So, you’ve created a product or service, and you’re anxious to maximize your income and grow a successful business. Or, perhaps you’ve been involved in business for years, but have struggled to boost sales, or even get a foothold in your niche.
It doesn’t matter where you are in the process, your goal should be to develop a successful pricing strategy that positions your brand above the competition.
Sounds difficult? Not at all!
The key is to know your market and to determine, early on, how you could use pricing as a powerful positioning tool.
For example, brands like Dollar General use pricing as a positioning tool to encourage consumers to shop at their outlets to save money. This is referred to as penetration pricing.
On the other hand, some companies have positioned themselves as a premium or luxury provider of products, often employing a scarcity element into their marketing, and their price point reflects that, such as Rolex or Luis Vuitton. This is referred to as price skimming.
And finally, there is what’s considered middle-of-the-road pricing strategies that often involve graduated pricing in the form of upgrades, or simply positioning your offer so that it appeals to the large majority of customers stuck in the middle of two main price points.
There are many different ways you can utilize the power of pricing as a positioning tool to solidify your brand and maximize your income.
It begins by making the decision of what your point of entry will be and choosing a pricing model based on your product or service.
And finally, understand that whatever price point you choose, you will be alienating certain customers. Whether you go in with a lower price point, a higher one, or somewhere in the middle, it’s impossible to appeal to the masses.
And that’s okay!
Because in truth; a product cannot be all things to all people.
Business owners and companies who attempt to please everyone often find themselves in a stagnant phase of growth. When the focus is too broad, and you haven’t identified your core audience, you’ll always chase the sale.
In reverse, the more you know your target audience, the easier it will be to attract customers and build a loyal tribe of buyers.
You’ll know what is most important to them and can align your marketing message to highlight those benefits.
Further, the better your marketing message resonates with that audience making it easier to target them in future campaigns.
As an example, in 2013, Nathan Barry quit his job as a software programmer to start his own business. He created a SaaS platform to help bloggers, podcasters, and authors.
Nathan struggled. His profits were meager, and people continued to tell him he’d made a mistake. It was clear that he had to decide whether he wanted to quit or work even harder. He chose the latter.
Today, his company, ConvertKit.com, has many employees and an annual earnings statement of dozens of millions of dollars!
What did he do to get there?
He positioned his product to focus on one specific targeted group who saw immense value in his service and then priced it accordingly.
Audience concentration will not only help you find your target customer base, but it will reduce the number of people you’re attempting to service at once.
With smaller groups, you’re able to specifically cater to their wants and needs, who then, in turn, refer more customers just like them.