Reilly Newman | When a brand is leveraged for a business to increase its pricing power, it can be a very powerful tool to drive profitable results. (If you are unfamiliar with pricing power, we suggest you read our article “The Price is Right“)
Once a strong brand is developed, pricing power can become a valid option for your business. But as with all things — with great power comes great responsibility.
By increasing the pricing power of your business through an effective brand, you are going to raise your prices without harming your demand. This is due to the improved perceived value of the business thanks to the brand (see our article “Pricing Your Brand” for more info).
Here’s the catch: As an awesome brand that your audience now looks to, you are now trusted even more than you were as just another business. As there are many reasons why your perceived value would increase (due to your brand strategy) this is the very reason why you can now charge more. You have the recognition and now the honor of having responsibility beyond just providing a service or product.
Ex. This is similar to getting a raise as you step up the old corporate ladder. As you increase in status you take on more responsibility (liability and risk) in your position. And that’s the reason why you get a bump in your salary. The higher you go (and the more you get paid), the more engrained you become in the organization due to the responsibility being compounded.
This also explains why the majority of businesses can’t simply just raise their pricing. Yet a brand can more easily raise its pricing with little to no turbulence.
