This is a Quora question I was asked to answer.
Here’s how I would go about finding customers who will pay the highest price for my products.
The first thing I would do is create high quality products that customers will rave about.
I would create a highly polished brand that looks good and presents well via my website, with ample social and brand reputation marks through third party certifications and verification and consumer testimonials.
I would also have excellent customer service.
When I build in these main elements into my products and company, I am giving consumers more confidence and comfort in doing business with me, which can allow me to charge a premium in pricing.
Apple is probably the best brand that exemplifies this, which allows them to charge prices that gives them incredible profit margins.
When selling through offline resellers, I want to pick them carefully because there is a hierarchy of reseller channels and the types of customers they attract. In the U.S., they are as follows:
- The dollar and discount/mass channels (Dollar General and Wal Mart, respectively), are not going to be the best channels to attract customers who can and usually willing to pay extra. They are the channels with the most price sensitive consumers.
- Next up are mainline mass channels like grocery, Costco and Target. Although Costco could be considered a retailer that attracts high end buyers.
- Next is drug stores
- Finally, I have my specialty channels with high end retailers/resellers. In food, for example, that would be Whole Foods Market.
So, I would not want to sell my product in the lower end channels and focus on the high end channels, otherwise I would cannibalize my sales in favor of the low-end channels.
Just like selling offline, there is a hierarchy in online resellers and I would only pick those that attract high end customers.
For marketing, I would focus on the following to attract high end customers:
- Retargeting look-a-like audiences that match to my high end customers only.
- Display or native advertising through other website that attract my high end customers.
The big takeaway from all the recommendations above is to make sure that I am not selling my product everywhere at different prices, because consumers, whether they are high end who can better afford my products or not, will always default to buying from where ever the price is cheapest.
The places where I might resell my product I want to enforce my pricing through what is called MAP (minimum allowable pricing) agreements.