How a better brand story helps you charge more
2 July 2019 | Storytech Team
Working to grow sales is an understandably common activity. Less common is asking how we can increase our prices.
The commercial effect of a 10% price increase is far greater than a 10% sales increase – and a telling a great story has been proven to increase a product’s value in the minds of consumers. Here’s how…
All sales come with some kind of cost - the cost of the goods, or the cost to provide the service. Some of the money that comes from extra sales flows down to the bottom line. And some of it doesn’t.
But when you put your price up, all of that money flows straight down to the bottom line. If you increase your sales by 10%, you’re half as better off than if you increase your price by 10%.
So if you’re trying to maximise the amount of money your business makes, it makes more sense to try to put your price up.
But how do we do this without losing customers along the way?
In 2013, some researchers in Helsinki did an experiment. They asked people how much they’d pay for a particular cosmetic product they’d never heard of before.
Half the group was told all about the product – what it was made of and what it did. The other half were told about the product too. But they were also told about the company behind the product - that company’s history, what their values were, and why they made the product.
In other words, they learned about the product, and they also heard the brand’s story.
Then everyone was asked what they expected the product to cost. The first group said they expected the product to cost 18 Euros. The second group, who’d heard the story, expected the product to cost 29 Euros.
Because they’d heard the story, they’d concluded for themselves that the product was worth 60% more.
Then, everyone was told that the price of the product was actually 31 Euros. They were asked whether they’d be willing to buy the product at that price. 50% of the first group said yes. The other 50% said no.
The other group? The one that had heard the story?
100% of them said they’d buy the product for 31 Euros.
The researchers’ experiment had created two completely different kinds of customer for the exact same product - one who was happy to pay more, and one who wasn’t.
The only difference? Telling their story.
Ad agency Hill Holliday repeated this research across a range of different scenarios, finding the same effect of storytelling:
So if you’re looking to create more value in your business, think about creating and telling a stronger brand story.
With Storytech, it’s easy - it’ll take you just one day and cost just $500.
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