The Pricing Strategy For Selling To The Top 1% - Skim Pricing
// Based on my book, "Pricing Photography" //
Skimming is a process farmers do to get the best part of milk. They leave milk sitting for a while, and then the cream rises to the top.
In skim pricing, we try to sell to the best customers, the ones who can pay more without any problem. In every market, some customers really, really like a product, and they don't care how much it costs.
Skim pricing is when you decide to sell to these special customers at higher prices, so you make more money than if you sold to a lot of people at lower prices.
With skim pricing, you don't worry about selling to everyone. You focus on giving the "best value" to a small group of special customers, like the cream of the crop.
You might not sell as much, but you'll make a lot more money. It's selling to the top 1% of the 1%.
Jason Marrs in No "B.S Price Strategy" , says, to concentrate on the best customers and don't worry about selling a lot to everyone else. Only some people can be part of the special club, and they are the ones to focus on.
To keep doing skim pricing, you also need to be significantly different from others in some way. You have to show that what you offer is way better than what others have.
Just aiming for the special customers is not enough. These customers won't pay a high price unless they see a lot of value in what you offer. So you have to show them why you're so special and worth the higher price.
You have to stay different from your competitors. If everyone starts doing the same thing, your skim pricing won't work. You'll be too expensive compared to others in the market.
Skim pricing is only good when you can make more money by selling to a small group of customers who don't mind paying more, and when your product is different and better than the rest.
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