Does Branding Allow You to Charge More?
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
CapForge Founder and Owner Matt Remuzzi gives his take on how customers perceive pricing.
Video Transcript:
Business Advice Video:
Did you guys hear about – there was a video of – they set up like a fake luxury store? It was called like Palessi, and all they had was Payless shoes in there. Like 20 dollar shoes but they named the Palessi. Put a little asterisk on there. Had $800 – $900 price tags on these 20-dollar shoes. And people were coming in lining up to pay $800 for some shoes that cost $20. Branding. If you can brand your business, if you can brand yourself, you can sell anything to anyone at any time.
Matt:
Well yes, I mean, it’s a good point in that people tend to take the price that you put on something at face value. And decide whether or not they want it from that point. Not comparing whether or not “Boy that looks a lot like a shoe that I could get at Payless for 20 dollars”. That the immediate thought somebody’s gonna have is “Well this thing has an 800-dollar price tag on it. There must be some difference between this and the Payless shoe. Otherwise they’d be charging $20 for it”. So people take kind of the price at face value and evaluate from there. That doesn’t mean though that you know, you can just charge whatever, as long as you have a brand, any brand and charge anything you want, and people will pay. You may find one or two people who are gonna assume because the price is high that the value and whatever must be there, but a lot of people are not gonna be fooled. They’re not gonna be willing to spend whatever you wanna charge just because you’ve named a high number. So this can work to some extent, and price does send a signal, but it’s not quite as easy as stick a brand on something and charge five times or 10 times what the going rate would normally be and expect to have a line out the door as this video implies. It’s not quite that easy.
