Is Premium Pricing right for your aesthetics business?
Have you ever thought why it is that some people are willing, or even prefer, to pay more for seemingly equivalent products or services that are available at MUCH cheaper prices?
I recently went to Italy with some friends. I flew with RyanAir. Cheap and cheerful. A bit of queuing, a two hour flight, no frills, very basic…but it got me from A to B and back again for about £150.
A few of the others flew business class from the UAE with Etihad. Their experience was vastly different. A beautiful airport lounge to wait and work in, unlimited prosecco, a tasty in-flight meal. A bed. Pyjamas. Express boarding. Luxury, convenience and a much more refined, high-end, bespoke experience. For around £2500.
What this demonstrates is that value means different things to different people and often has nothing to do with price!
The idea behind premium pricing is to cultivate a sense of your products or services being better than the rest in the market. What “better than” means depends on your ideal patients. This helps you to maximise your revenue with a client base for whom price is not the most important factor when choosing a practitioner.
A quality brand + great products + incredible customer care allows you to position your services and business to appeal to a more discerning, affluent clientele and charge a premium price.
Aspirational clients will be more likely to engage with your business over a competitor despite relatively similar services. Your marketing strategy, content and communications must align and boost this perception and your client experience, at every point of their journey, must be incredible…EVERY.SINGLE.TIME.
Premium pricing isn’t right for all businesses.
Premium pricing is appropriate for beautifully branded businesses, with gorgeously luxe clinic spaces, who use the best products and who provide exceptional, bespoke customer service.
Remember that clients have very clear ideas about what constitutes value - and for many, it’s not about price - it’s a whole range of other factors. But if the price does not match this value, their expectations will not be met, and your attempt to premium price will fall flat. Your services will be deemed poor value.
Here are a few things to consider when deciding whether a premium pricing strategy will work for your business:
Beautiful branding - luxury branding, premium colour combinations, beautiful reception & clinic spaces, gorgeous interiors
Know your core clients well — understand the wants, needs and desires of your ideal clients. Consistently demonstrate your value across all available channels. Make it clear why your services are worth the expense
Understand your USP — identify and clearly communicate the USP of your services across your marketing channels
Personalise experiences — customers will pay more for convenience, faster access, better service, personalised service, enhanced product offering, exclusivity…if you offer these, make it clear in your marketing
Location, location, location - when a supermarket chain, like Waitrose, decides where to put a new store, they use location analysis software, like Acorn, which segments households, postcodes and neighbourhoods into six categories, 18 groups and 62 types: these range from Affluent Achievers (Premiership footballers, hedge fund managers and entrepreneurs) to the Difficult Circumstances group of single parent, elderly or low-income households. They will choose the location carefully to ensure the demographic they wish to attract is plentiful in that area. The same applies to you and your business. Be intentional about where you set up.
Hold your nerve - in quieter times, many businesses stimulate bookings and sales with discounts or promotions. This approach is DEADLY to a luxury brand, instantly cheapening and devaluing it.
Premium pricing involves setting high prices and maintaining them there.
X Avoid price skimming
X Avoid discounting
X Avoid promotions
X Avoid associations with brands that aren’t luxury/premium
X Avoid anything that cheapens your brand
Remember, premium pricing isn’t the right strategy for all businesses - don’t blindly assume it’s the right strategy for you, your business & your demographic.