I love a good burger (don’t tell my PT) like many others, but I’m unsure I’d pay €5,000 for one. Would you?
De Daltons diner in Voorthuizen, Netherlands has had a burger called ‘The Golden Boy’ on its menu for a couple of years. It uses some of the most premium ingredients including Beluga caviar, king crab, Spanish Paleta Iberico, white truffle, and English cheddar cheese (it had to be English cheese).
For most of us, this probably seems ridiculous and a touch extravagant but the reality is that for some, it will be appealing. They will head to the restaurant to sample The Golden Boy or head there to see what the fuss is about and purchase something equally extravagant on the menu. Job done.
The reality is that most of us would pay somewhere between £10 and £15 for a decent burger and chips, and even occasionally opt for a more cost effective option at a well known chain.
This shows that the market for burgers, depending on the demographic being targeted, ranges from the sublime to the ridiculous and shows that there is something for everybody.
Somebody shopping in a well known chain wouldn’t want The Golden Boy, and vice versa.
Now, are you the premium offering in your space or are you in a beauty parade with the masses?
Often when competing in the mid-tier, competition is much higher, the clients can be indecisive (do they want premium/ value or lower cost/ a quick turnaround?) and price often trumps service levels.
Think about this – somebody in your market will be charging the highest price. Why isn’t it you?
Here are the top five benefits of operating in the more premium end of the market:
- Higher profit margins – premium offerings will command premium prices which should give a healthier margin
- Enhance brand image – a burger at €5,000 must be good right? If you have a premium offering, there will be perceived value
- Target affluent clients – affluent clients don’t want to work with the cost driven providers, they want to work with the best due to status and affordability
- Innovation and differentiation – a premium offering for affluent customers will drive a culture of innovation in your business
- Higher service levels – a premium price and offering will necessitate best in class service levels from you
I remember when I was approaching the end of year two in business and I started working with my first Business Mentor. I doubled my prices overnight and immediately attracted better quality customers and had a better conversion ratio (“I must be good if that’s what I’m charging!”).
I am not advocating that you double your prices tomorrow, but the reality is that you may be undercharging because you are competing in the mid-tier with many competitors on price.
Yes, it is tough times out there and accessing client spend is tough but De Daltons will still be selling burgers to their target clients.
It is time for you to get clear on your market positioning. Where do you sit when it comes to market segmentation? How clear are you on your proposition and why should your prospective clients buy from you? What are your current clients saying about you behind your back?
Getting your proposition, target market and brand crystal clear is key to building a quality pipeline, charging the right prices, increasing conversion ratio and driving referrals. Get these right and you’ll be one step ahead of your competition.
Remember, you attract what you charge.
If you charge £7 for a burger, you’ll attract £7 clients. If you charge €5,000 for a burger, you’ll attract €5,000 clients.
If you want to up your game and get out of the beauty parade when it comes to pricing and chasing the same clients as everybody else, now is the time to change direction. The mid-tier is dangerous because clients either migrate up or down, they don’t stay mid-tier.
Which end of the market do you want to play in?