{"id":106,"date":"2020-08-06T20:59:02","date_gmt":"2020-08-06T20:59:02","guid":{"rendered":"https:\/\/salarydistribution.com\/2020\/08\/06\/raise-your-prices-5-strategies-luxury-brands-use-to-increase-their-perceived-value\/"},"modified":"2020-08-06T20:59:02","modified_gmt":"2020-08-06T20:59:02","slug":"raise-your-prices-5-strategies-luxury-brands-use-to-increase-their-perceived-value","status":"publish","type":"post","link":"https:\/\/salarydistribution.com\/affiliate-marketing\/2020\/08\/06\/raise-your-prices-5-strategies-luxury-brands-use-to-increase-their-perceived-value\/","title":{"rendered":"Raise Your Prices: 5 Strategies Luxury Brands Use to Increase Their Perceived Value"},"content":{"rendered":"
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<\/i> <\/i> <\/i> <\/i> <\/i> <\/span> 4.6\/5<\/span> (9) <\/span> <\/span><\/p>\n

Legendary venture capitalist Marc Andreessen\u2019s #1 advice for companies is simple: raise your prices<\/strong>.<\/p>\n

In an interview on the Tim Ferriss<\/a> Show, he said:<\/p>\n

\u201cThe No. 1 thing \u2014 just the theme and we see it everywhere \u2014 the No. 1 theme with our companies have when they get really struggling is they are not charging enough for their product<\/strong>.<\/em><\/p>\n

It has become absolutely conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible under the theory that if it\u2019s low-priced everybody can buy it and that\u2019s how you get the volume.\u201d<\/em><\/p>\n

Some of the largest companies in the world such as IKEA, Costco, Walmart, and McDonald\u2019s aim for low prices. It\u2019s a deliberate strategy because they\u2019ve created infrastructures (which cost billions of dollars in investments<\/em>) designed to profit while offering low prices.<\/p>\n

For everyone else, we\u2019re much better off trying to charge more money.<\/p>\n

We both know that today\u2019s environment is cutthroat. Customers are expecting<\/strong> free shipping, free returns, and stellar customer service. It\u2019s free for the customers, but it comes out of your profit margins.<\/p>\n

And everyone knows that traffic costs\u2014<\/em>the cost of acquiring a customer is only gonna go up each year.

The best way to compete is to increase your profit margins by increasing your prices.
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The single most important decision in evaluating a business is pricing power. If you\u2019ve got the power to raise prices without losing business to a competitor, you\u2019ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you\u2019ve got a terrible business. \u2013 Warren Buffett<\/p>\n<\/blockquote>\n

It isn\u2019t as simple as increasing your prices and calling it a day. It\u2019s a delicate balance between price and conversion rates that you have to measure.<\/p>\n

Increasing your prices is a long game.<\/strong>\u00a0It takes a different strategy than what most affiliate marketers are used to.<\/p>\n

Instead,\u00a0increase the perceived value<\/strong>\u00a0of your products and you can raise your prices<\/strong>\u00a0without lowering your conversion rates.<\/p>\n

This article was inspired by my experience of shopping for bedsheets.<\/p>\n

For years,\u00a0I\u2019ve been sleeping on $30 bedsheets from Amazon Basics. They do their job well, but I\u2019m always trying to improve my sleep. The more comfortable my sleeping arrangements then the better I\u2019ll sleep.<\/p>\n

So, I went down a rabbit hole of researching bed sheets. From there I discovered D2C brands like Parachute<\/a>, Boll and Branch<\/a>, and Brooklinen<\/a>.<\/p>\n

Imagine my shock when I saw that some of these companies were charging $400+ for bed sheets<\/strong>. And some of the bed sheets were sold out!<\/p>\n

How the fuck<\/em>\u00a0are they getting people to pay that much for bed sheets<\/em>? Especially when the main benefit is comfort\u2014<\/em>an attribute that online customers can\u2019t see or feel.<\/p>\n

But then I remembered\u2026I\u2019m a marketer. I\u2019m sure part of the price point is because the material costs more, but so much of the markup is due to the perceived value<\/strong>.<\/p>\n

That\u2019s what this article is about.<\/p>\n

I\u2019m going to teach you about the concept of perceived value, and some actionable ways you can use it to increase the price point of your products.<\/p>\n

I\u2019ll be using e-commerce brands as examples, but you can apply the same concepts to pretty much anything that can be sold such as Software As A Service (SAAS), consulting services, and more.<\/p>\n

Perceived Value is STILL Value<\/h2>\n

Imagine there are two shirts.<\/p>\n

They\u2019re made from the same factory, using the same material.<\/p>\n

The cost of each shirt is $5.<\/p>\n

\"Depositphotos<\/p>\n

However,<\/p>\n