At a recent Order of the Golden Rule conference in Key West, I reminded the 55+ attendees that merchandise pricing is as much about creating expectations as it is about the actual prices listed.

By grouping prices (in a Good, Better, Best arrangement or other type) you can create specific expectations for clients.

Imagine, for a moment, that I’ve told you that a specific model of flat screen TV costs $3000.  Without some reference point, you might be shocked.

But now imagine that you see an entire display of televisions ranging from $1500 to $6000.  What happens when you see this array of product?  Do you give up and complain that all of them are overpriced?  Or do you settle down and figure out which one you want to buy / can afford?

Consumers (even funeral consumers) want benchmarks and will tailor their choices to meet those expectations.  For more about how families react when your quoted price doesn’t match your final price, see the post, Reducing Sticker Shock.

Ask any person on the street how much they’d pay for printed funeral service items and you might get answers ranging from $25 to $100.

But present the same person with a range of register book packages, priced from $100 to $300 and the answer gets closer to $200.

And consumer expectations can also shift over time.

Consider the standard or base features people expected on a car from 1988:

Manual windows and locks
Manual transmission
AM/FM radio

That car sold for $5000 or less.  Today, people expect far more as standard, including:

AM/FM radio with CD player
Power locks and windows
Automatic transmission

Even more interesting, that entry-level car now costs between $12,000 and $15,000.  Using the inflation calculator, I figure that a $5000 car in 1988 would cost $8650 today. 

How did the concept and price expectation of a “basic” or “entry-level” car change in just 20 years?  I’d venture that much of it was powered by consumers and helped along by car companies.

This is a fascinating topic and it’s even better in person.  Don’t forget, I’ll be presenting “Good, Better, Best Marketing” at the IFDF Convention in June 2009, along with a discussion titled “Stop Fearing Cremation.”

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