Lee Salz is a Featured Columnist for The Business Journals.
Imagine you want an apple and have two choices. Both apples are the same size, weight, type, color and flavor. However, one of the apples is priced 20 percent higher than the other.
Which apple would you buy? Of course, you would buy the cheaper one, given the sameness of the two.
What if the more expensive apple was organic and that was important to you? Which apple would you buy now?
What if the more expensive apple could be bought down the street and the cheaper apple was five miles away? Which apple would you buy if you didn’t have a car?
In each case, buyer behavior was affected without changing the core of the apple. None of the five attributes were changed, but buying decisions were. Once you understand what is important to your buyer and have mastered your product, you can leverage sales differentiation to guide buyer decision-making. Helping buyers recognize the importance of those differences is the key to positioning higher pricing. Price is the ultimate decision-factor in the absence of differentiation.