Some Ways Well Known Companies Deliver Value
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TRANSCRIPT
This is Stuart Webb Business Success Mentor, Author, Podcast host, Speaker, CEO and Founder of the Complete Approach - with another 1 take video blog - all the mistakes stay in
Last time we spoke about how to add value to your customers. Now I want to show you some examples from some well-known companies
People are willing to pay for items they believe will improve their lives. Making such a product and winning over customers' trust are harder said than done, though. Value-based pricing is the perfect pricing model because of this.
Some of the biggest businesses in the world use it as a pricing strategy.
It's a two-edged sword that can make or break your market share as well as your reputation in your target market.
There is no denying the effectiveness of value-based pricing. But how do you implement a value pricing strategy that guarantees the highest profit based on perceived value? More importantly, how do you instil in buyers a sense of perceived value?
These businesses have the solution.
Check out what they have to offer.
Example #1 of Value-Based Pricing: Starbucks
Starbucks is one of the few companies that can match it in terms of brand loyalty. Given that coffee is a much more experiential product than technology, their customer segments are even more diverse than those of tech companies.
Starbucks has mastered peer-to-peer marketing, which is one of the reasons why you never see Starbucks ads on TV. Despite other options being available for half the price, people still swarm to the neighbourhood Starbucks to get their caffeine fix because they have such a strong relationship with their customers.
What secret does Starbucks use?
Starbucks serves a sizable number of people worldwide. Their brand is so well-known that they are now considered to be the standard for high-quality coffee-based beverages. Customers once again associate a product's name more strongly than its actual contents, though.
Customers are encouraged to socialise with one another at Starbucks. Customers are free to stay in their shops as long as they want without being pressured to make repeated purchases. Then there is the stigma associated with entering a social setting with a cup of Starbucks in your hand. Starbucks is relying on the fact that that image is probably worth much more than the actual coffee.
The business has also embraced seasonal culinary trends very quickly. Since they were introduced, their "pumpkin spice lattes," which are inspired by desserts that people like to eat in the fall and winter, have sold over 424 million units. Since then, Starbucks has released a number of seasonal beverages, all of which promote the appeal of dressing in style and partaking in current trends.
Customers' perceptions of Starbucks' product value are based on:
The product's urban allure (a low price for a good social image)
The warmth of their store's interiors and the logo's style
The freedom to interact with others without restrictions while on store property
Starbucks now has a customer base with a higher average income because they have raised the price of their coffee over time. That customer base's loyalty is what sustains the business.
Example #2 of Value-Based Pricing: Apple
Without mentioning Apple, no discussion about value-based pricing is complete. The technology company has perfected the art of charging more than is reasonable.
They can as well. They have one of the most devoted customer bases in the consumer technology industry, after all.
Additionally, their business strategy essentially compels customers to expand their technological arsenal to include most, if not all, Apple products.
Despite recent criticism of its business model, Apple's products continue to be expensive.
What is Apple's secret?
The customer is the starting point and the final destination in Apple's pricing strategy. They serve as a prime illustration of the brand name generally having greater value than the product.
Their initial pricing reflected the ease of use for the customer and the simplicity of their products. This was an exercise in gaining market share, a solid customer base, and a significant amount of customer value over time.
They achieved this by creating an operating system that put user friendliness as a top priority, making it superior to the products of their main rivals at the time. In the United States' continental interior, Apple products now make up the majority of personal computers, smartphones, and various other tech gadgets (wearables, MP3 players, etc.).
Apple's OS holds a 39 percent market share in the US.
Customers of Apple believe that their product is valuable becaust:
The current Apple ecosystem that they have created through acquisitions over the years of knowledge of iOS and macOS
The first company to introduce a true smartphone system was Apple (which made them the default pioneers of the technology for end-users)
The sleek design distinguishes this item from similar ones.
Integration of software and hardware enables Apple products to function very well within that ecosystem.
The bottom line is that Apple has abandoned market research in favour of building and sustaining brand loyalty, and their profits show it.
Finishing up
If the businesses mentioned here have taught us anything, it's that devoted customers will buy your product no matter how expensive it is.
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