Brand pricing: how to do it well & command your worth
Been looking for a chance to share this brand photo for ages - take the guess work out of pricing and remove all the swirling questions in your mind!
How to gain confidence in using pricing & branding effectively as a small business brand: pricing and branding are two important tools to maximise your success as a small business. We want to show you how to use pricing to accurately reflect the aspirations of your brand (not drag it down); and how to use your branding to attract your ideal clients (and turn away those who are not a good fit).
In this blog we want to answer the question, ‘how can I charge what I’m worth as a business and get the right customers?’.
In the same way, if you resent the fact that you are not earning what you think you could or the wrong type of clients keep enquiring, we want to help you break out of that vicious cycle.
Stop undercharging as a small business brand; regain a healthy understanding of your worth; and use your branding to its full extent to attract clients who are a good fit for you (and ward off clients who waste your time or are unsuitable).
If you’d like to read more on this fascinating subject we highly recommend ‘The Psychology of Price’ by Leigh Caldwell, which is an excellent, practical introduction to the topic, written in British English (always nice!) and avoids any underhand practices.
Wildings is a design agency in Devon. Our studio is based in Torquay, South Devon, and we provide branding for creative, hospitality and lifestyle businesses across Devon and the UK (like garden designers, interior designers, architects, floral designers). If you’d like to find out more, explore our branding for small businesses or contact this branding agency in Devon →
Create strong associations with your brand pricing
With a lot of purchases, pricing is simply not an issue, because customers regularly and routinely encounter the product or service. Tea, coffee, food or other everyday consumables.
The problem small businesses face is when customers haven’t encountered their product or service before (or perhaps not for a long time) so don’t have a good idea of either its value or what it should cost.
When a customer face the question, ‘I don’t know what it costs’, their first and instinctive step is to compare it with the nearest equivalent or a similar experience they’ve had in the past.
If a prospective customer makes the wrong associations with your brand that’s a problem, particularly assuming you’re a low-value, budget brand when you’re not.
Here are some thoughts on how to influence prospective clients in a positive way.
The core principle is to reduce the pricing guesswork a client needs to undergo to peg you in at the right level
Aim to reduce the gap between the value of what you offer and the price a client might expect to pay (ideally raise the lower bar of this range to be closer to your preferred price point!)
Low prices and undercharging create suspicion in a client’s mind: they beg the question, ‘is there something sub-par about this product or service?’
If you stand out from competitors solely by being very cheap, you become the anomaly and it creates doubt about whether you can deliver your promises
Alongside pricing, branding allows you shape the presentation of your products and so further influence the expectations of your customers
If you inadvertently align your business with low value brands through your visuals and aesthetics, customers will subconsciously expect low or budget pricing
If you aspire to be a high-end brand, but your branding is incoherent or incorporates the wrong elements, this too will create tension in your client’s mind
There’s nothing wrong with appealing to a mass market, but if you align your brand with businesses in this space, yet want to appeal to high-net worth individuals, that creates a subconscious dissonance
Branding helps to position you in a visual way in the right ball park. It’s very hard to position your business as high-end if your branding has a budget-look.
Overall, avoid allowing customers to guess at your pricing - give a clear indication through your branding that it is high, low or middle of the road. This sets healthy expectations for talking about pricing with your clients.
Use your branding to create associations with the type of products or services that best reflect what you sell. Without these subconscious handrails, clients guess at what is most closely associated and use that as their guideline.
Read more on The art of pricing: a dive into pricing strategy and price positioning from Rentle.
There’s no such thing as a fair price when it comes to brand pricing
“Charging different prices is often fairer than charging everyone the same price. Companies should take steps to educate customers and win their support for this approach.” BCG*
Pricing is to do with value, not cost. It’s easy to fall into the trap when running a business that pricing should be in some way be fair.
If that’s you, first stop and ask the question ‘what is a fair price?’. Then look at what competitor brands charge for the product or service you offer. You’ll probably see plenty of disparity, and if your industry is anything like branding or website design, you’ll see people charging a lot and not always delivering a great deal.
The trouble with pricing is that it’s a very subjective area. Different customers are often prepared to pay quite a wide range of prices for the same product. This is ultimately driven by what they value - there is no set standard. Even something everyday like a loaf of bread can vary, depending on whether it’s artisanal, sourdough or it’s location.
If a customer values a product or service highly, they will pay more, and the opposite is true, so the notion of fairness is not applicable. However, we do want to be ethical, so we should always be able to justify our prices by offering examples of its benefits that relate to the customer.
Here are some of the key aspects of finding the balance between costs and value:
Understand the difference between cost and price
Cost is the aspect that matters to you internally in your business and relates to what it incurs you to create, manufacture or deliver a product or service
The price is the external element more focussed on your customers: it reflects the value or the worth of the product or service to your customer
Cost and price are not the same thing - it’s vitally important that you set your prices based on the value you give, not on the costs incurred in delivering it
Practically, work out all the costs involved in delivering your products or services, and don’t forget to factor in your time as well as covering your monthly overheads (things you have to pay regardless of whether you sell anything)
Once you have this benchmark look at the gap between delivering your product or service and the typical prices in you market
This gap is an indication of the value that you can offer customers, and depending on where you are in the market, this gap will be bigger or smaller
From a branding angle, undergoing a comprehensive branding process will draw out who your ideal customers are, their pain points and how you address them
These insights give you a much more robust foundation on which to base your pricing structures
A lot of businesses undermine themselves when it comes to pricing because they don’t fully understand their own worth.
Pricing is ultimately driven by the self-confidence to charge what you believe your product or service is worth to your customers.
There is an upper limit, as you can only charge what the market is willing to tolerate, but businesses more often undercharge through pricing anxiety or not believing in the value of what they offer.
*Read more on Solving the Paradox of Fair Prices from BCG.
How to reduce the guessing game from brand pricing
“Everything is worth what its purchaser will pay for it.”
- Publilius Syrus, Sententiae 847
This area focusses on the difficult question, ‘what’s the best price to charge for my product or service?’. As you may have experienced or observed from other businesses, some customer pay more for the same product and some less.
The reason for this because some may have more money or a bigger budget or perhaps have put a higher value on the product; in contrast, some are less willing or able to pay for the same item. The way to tackle this is to stop thinking of one static price and instead give customers more access to your products.
This is not to say do more for less, but charge each customer what he or she is willing to pay.
‘But how can I realistically do that?’ you may ask, even with a handful of enquiries it can become highly unwieldy, let alone tens or hundreds of potential sales.
Here are some pointers on how to navigate this area:
Firstly, you need to find out what a client’s budget is first
If you’re a product-based business, then do your market research first (we’re not taking about interrupting each customer before every single sale!)
By understanding what your customers are willing to pay you can work out what they value highest
Using that insight you can then emphasise that aspect of your product or service to create a premium offering
In addition, you can create a product range with a couple of different options at lower price points to appeal to those with lower budgets
The key thing is to put more features, functionality or emphasis into the benefits of the upper-end options and remove appropriate elements from the lower-end offerings (definitely don’t do more for less!)
From a branding angle, you can create sub-brands or visual categories within your brand guidelines to signify tiers within your brand (supermarkets often to this with their ‘everyday’, ‘essential’ or ‘value’ products)
Although initially it might seem muddle-headed or counter-intuitive to aim to charge each customer what they are willing to pay, what it allows you to do is win a greater share of revenue from your client pool.
If you’ve got a strong, popular brand it also serves to increase your brand favour, as clients feel they have received value from being able to access your offerings, even if not your premium offering.
Lastly, if you’re a service-based business, asking for a budget first and then tailoring your offering is an effective approach, particularly when customers want a high-ticket time, but simply have no idea what things cost.
Read more in Business Marketing: Understand What Customers Value from HBR.
Price anchoring: increase perceived value by leading with your premium offering
There’s nothing particularly novel or complex about this area of brand pricing; instead it encourages you to emphasise the full extent of what you value first, rather than presuming to start from the bottom up.
This area of pricing is also known as ‘price anchoring’.
The overall principle is when talking through a client’s budget or displaying pricing options, emphasise your top tier offering first or prominently.
A client or customer may not want to be able to go for your premium product, which is fine and to be anticipated in a number of instances.
However, what it does do in that case is increase the attractiveness and appeal of the eventual lower-priced sale.
Practically, here are some ways to use price anchoring in your small business:
In a discovery call or when talking through an estimate, avoid offering one price only, particularly if you are unsure of a client’s budget or they haven’t stated it
The reason for this is that if you are way off with your pricing (particularly too high), it’s more likely that you’ll get ghosted and never hear back from the client
A one-price only approach tends to encourage customer price shopping, where they’ll then compare you with others, as they have no idea where to peg you
To counter this with price anchoring, present your top-end offering first, but also include a starter option and middle of the road offering at the same time (remember to tailor what you offer at each level - don’t do more for less at the lower end)
Ideally, you want to guide people to the middle offering which more or less fits with their stated budget: the lower offering doesn’t really cover everything they’d want; and the upper offering is an ‘in an ideal world’ approach
This reduces the prevalence of price shopping because if a client can’t afford your premium product, they can always access what you’ve got at a lower or middle price point; they don’t then need to look around as you’ve covered the bases
P.S. how annoying is it when you get ghosted!
The other bonus with price anchoring through a tiered approach is that there may be clients who are completely sold on your top-end, bells and whistles offering; if so, fantastic and you’ve created room to deliver your ideal work, as the budget gives you time and space to focus solely on this client (if you’ve priced things up correctly)
Lastly, in terms of your branding, you can use the same approach as above to emphasise where the greatest amount of value lies in your products or services so that if people go for a pared back offering, they’re felt with a feeling they’ve got a good deal and plenty of value
Although this is a fairly pragmatic approach to brand pricing, the key element is self-confidence. Without confidence and a strong sense of the value you offer, it’s hard to implement price anchoring effectively.
Confidence ultimately comes down to having robust branding in place - branding that has answered all the key internal questions about what you offer, who you work with and how you solve people’s problems (among other things!).
Although pricing is 90% confidence, that inner sense of worth needs to be based on tangible elements such as functional and emotional benefits, which you explored, understood and worked out in your branding and marketing and sales processes.
Overall, remember you’re probably more than capable of delivering what you offer; it’s only self doubt that stopping you. Price anchoring helps you show customers the full value of what you offer and increase the sense of value they get, even if they don’t go for your premium product.
When someone does, don’t forget to break out that rain-dance!
Read more on Why we tend to rely heavily upon the first piece of information we receive from The Decision Lab.
Anything else I should know about brand pricing?
So that’s a little intro to brand pricing - bringing branding and pricing together in your small business brand to increase your perceived value in the eyes of customers and avoid things like pricing shopping or missing out on potential revenue.
Here’s some further reading:
From Kantar: What should the price of my brand be? Three hacks to get it right
From Price Observatory: The 10 Pricing Rules Every Brand Should Know
From Prisync: Premium Pricing: Definition, Pros & Cons, Examples
If you’d like to learn more from us on branding or get visual inspiration, follow @wildings.studio on Instagram or read more of our blogs on branding too.
