Educating Customers About Price

When you get lots of phone calls or enquiries which all seem price based, or lots of rejections based on price alone, it can seem as though that’s all people care about.  To be fair, there is some portion of the population to whom price is the only deciding factor in purchasing decisions. However, I find most people are willing to get more than one quote, and willing to consider why those quotes differ.  I recently saw some cake business advice online which said (I’m paraphrasing here), “Don’t ever explain why you charge why you charge, people should just be paying you what the price is with no questions asked. Don’t bother trying to communicate with people who only ask about price, you’re wasting time. The clients you really want will just GET IT.”

What? They’ll just “get it”…?

The thing about baked goods is (especially custom made items) that your potential clients are not actually IN this business, so they don’t really have any idea of how much effort goes into creating those things.  The cake TV shows have done a LOT to educate the general public about the amount of effort and artistry which goes into what we do, but not everyone watches those shows.  Plus, there are a lot of perfectly reasonably decorated, mass produced baked goods out there which will do the job just as well.  If all your client wants or needs is a cake that a five year old will be happy with and which will feed 10 kids at a backyard party…you’re going to have a hard time justifying why they should spend $100 with you when a $20 cake from the supermarket meets their needs. The challenge for us as business owners is working on the people who see a cake (no matter where it’s from) as “just flour and butter,” and get them to see why our version of cake is so much more than that.

They don’t just “get it.” They really don’t.

Part of our job as business owners (no matter what we are selling) is to convince our customers to buy what we’re offering, and that means taking the time to explain why it’s worth why it’s worth.  You don’t need to look any further than McDonald’s to find a great example of this – they market their speciality and seasonal burgers by telling us about the 100% Angus beef, the Swiss cheese, the sourdough bun it’s on. Why? Because those special things are more expensive than your usual Big Mac and they want to convince you to spend that little bit more. They do not assume that consumers just “get” that the fancier stuff is worth the money, they explain why it is worth it.

Cakes – or whatever speciality item you make – are no different. You’ve got to market your products and your business precisely because not everyone understands what makes your product special.  Are there some people who will not care one tiny bit that your product is better? Sure there are. If they say a flat out “no” based on price, that’s okay…but there are plenty of people who, with a bit of education, will be willing to spend a bit more to get something a bit better.

Instead of just getting annoyed that “all anyone seems to care about is price,” and “I keep losing orders even though I’ve made my prices as cheap as possible,” – why not try educating? Re-examine your marketing. Re-examine how you answered their email about the price. Did you say, “A Peppa Pig cake for 20 people costs $50,” or did you say, “Thanks for your email! We’d love to make you a Peppa Pig cake for your son’s upcoming 3rd birthday. Our cakes are all baked from scratch, and we’ve got an array of kid-friendly flavours to choose from – I’ve attached a list for you to pick from. We’re also happy to customise the birthday message, and if you need delivery we offer that service too. To feed 20 people, you’re looking at a cost of $50. Please give me a call on 123-456-789 and we’ll get the ball rolling. I look forward to helping make your celebration fantastic.”

Does that second email require a little more thinking, a little more effort? Sure it does – but the investment in service and education are worth it if it means you’ve converted them into buying from you rather than just settling for the mass produced item.  Every company, everywhere in the world, selling anything at all is going to come up against people who seem to only care about price.  In every market (clothing, cars, food…) there will be companies who service the very low end, companies that service the very high end, and a whole lot of companies right smack in the middle of that.  Even the companies selling things for cheap have to market themselves and their products – because they are not the only ones in town claiming to be the cheapest. The companies at the top are no different – because they too are not the only one in town that sells a premium product.

Believing that your customers should just ‘get it’ and assuming that all anyone cares about is price is a fairly shortsighted view.  If you’re in this for the long term, you would aim to be the company that educates and then converts to the sale, accepts that some people just won’t be won over …but is clever enough to at least try.

Not everyone gets it, and not everyone needs to … but you would be foolish to not even try because you have decided ahead of time that they can’t be taught.

8 comments on “Educating Customers About Price

  1. So true, I went from winning 2 in 3 quotes, to maybe 1 in 4 now. I haven’t change pricing etc (Don’t want to go down the price dropping scenario) but I did get lazier in providing information – shorter and to the point now. I will get back to be being a little more charismatic 😀

  2. Thanks for the advice! I love it when a client says to me "You just made the party with this cake" or "The cake was the highlight of the party!" They really appreciated all the time and effort that went into their cakes. I want to be able to convey to a new customer who is just looking for price that what they will get is not just cake for the party but a memory of something special that their guests will also think back on.

  3. People now a days want more for less, i notice that also,when i have 10 clients asking for quatations and only close 1-2 accounts, I always tell my clients ask me what are getting out of your money. This is really informative article.

  4. When people ask me for a cake to feed 100 and want all kinds of detail and say they can only spend $60, I politely say to them, "Unfortunately for what you want, my price to feed 100 will be $_______. So you may want to try your local grocery store or Sam's Club, I am sure they will have something closer to your price range." Nicer way to turn them down without offending anyone. 🙂

  5. Thanks for this informative article I have been going through this exact issue where alot of customers are getting quotes but they aren't converting into orders, I believe my emails are personal,detailed and make myself excisable in further information, but I have been alot more "straight forward" as i have been lead astray" when customers have requested for pictures of my designs with the intention of ordering only to turn around and say they have decided against ordering with me, this is not professional as they don't realize the effort that is made, which is what you speak of. I will definitely review my email replies. Thanks

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