Here’s some amazing news. Diageo recently announced that next year they will be releasing a $150,000 whiskey.
That is not a misprint.
They really are going to ask people to pay 3000 times more than normal for a bottle of malt.
If you’re like me, you’re probably thinking who on earth would be silly enough to buy it?
The answer is, plenty of people. In fact Diageo expect to sell out of the stuff.
As their spokesman remarked, “We don’t think we’ll have any trouble finding buyers”.
This is worth thinking about.
If Diageo can feel confident asking for 150 grand for a single bottle of alcohol, maybe your company should introduce a super premium priced product or service.
Maybe not 3000 times more expensive than your usual products, but how about 3 times more?
Most entrepreneurs believe that they couldn’t possibly charge that much.
In fact most of them feel they couldn’t even offer a product that cost 20 percent more than their competition.
But having spent over 25 years advising a myriad of companies on pricing, my experience is very different.
If you position it right (emphasing exclusivity, premium ingredients or service, and focusing on value rather than price) at least 5% of your customers will choose your super expensive option.
Indeed, many companies find that 20% or more of their clientele pick the uber expensive product.
And here’s another interesting aspect of premium pricing: even if nobody at all buys your premium offering, they will think your current products are cheaper by comparison.
(For research that supports this, read the classic book on persuasion, ‘Influence’, by Dr Robert Cialdini).
So either way you win.
Why not take a few minutes now to conjure up some ideas for a really expensive product or service.
Create a good one and in a few months time you and your business partners may be celebrating record profits.
(Maybe with a bottle of that $150,000 whiskey).