I spent an hour yesterday afternoon with an audiologist who sells hearing aids…
And before you ask ~ no the hearing aid wasn’t for me. As my wife will confirm, I hear exactly what I want to hear.
Anyway, I asked him about the difference between the mid-priced units he sold, and the top of the range, which were about 40% more expensive. He said that the differences weren’t huge ~ a few bells and whistles (actually that’s a terrible analogy…the last thing you want on a hearing aid is a whistle!) which most people wouldn’t need or use…
So a lot more money for not much more benefit.
And yet these units sold very well.
Most products are affected by the phenomenon of diminishing returns as the price goes up beyond a certain point. Cars are an excellent example of this. The manufacturers create a standard car, and then offer more expensive variations on the theme, which offer some additional benefits, but the increase in price is far in excess of the increase in benefits.
I own such a car. It’s a Porsche 996 GT2, and when it was new, it cost about 70% more than the standard 996. It goes faster, and looks better, but to the untrained eye, it’s not that different from the standard product. In fact, in some respects it’s worse, because it has no back seats and many creature comforts have been removed, to save weight. Oh and they appear to have done away with the suspension. And yet, the original buyers happily paid over £40,000 extra for the car.
Now, before you think I’ve taken leave of my senses, I bought the car second-hand when it had depreciated to a point much closer to the current price of the standard car, and it’s actually now depreciating far less because of its exclusivity. But that wasn’t what influenced the original buyer. Like all buyers of premium-priced, top of the range products they purchased for one of a number of reasons:
1. They have plenty of money and always have to have ‘the best’.
2. They were prepared to ‘overpay’ for the unique benefit of the product.
3. They crave exclusivity ~ to own something that very few people have ~ and are prepared to pay for the privilege.
When you think about most of the things you spend money on, there’s usually the opportunity to buy a premium-priced product ~ one which is better than the original, but probably not better value for money.
Consumer durables, furniture, clothes, food, holidays…just about everything.
And here’s what’s interesting for you and me…
No matter what product or service you sell, there is probably a hardcore of your customers who would pay considerably more for a ‘better’ version of the same product or service…and they’ll be prepared to pay far more than the enhancements cost to create.
If you’re not currently doing anything to serve that latent demand, you’re missing a big profit opportunity. What’s more, you’re leaving yourself wide open to competitors jumping in and taking the cream off the top of your market.
This Will Make You Money, Guaranteed
I know, I know – It’s very big claim in that subject line.
But this really is one of the few extra income ideas where I genuinely believe you can use the word ‘Guaranteed’!
Look, I don’t want to beat about the bush with this.
I’ve had many years experience with these types of systems and this is one I can strongly recommend.
Take a look today: