How To Communicate Value and Pricing

How to price and how to communicate value gets a lot of attention in companies. They stress whether they are revealing too much on their website and other content.

Let’s take a look at someone doing it right. Tom Bihn has been making high quality bags since the early 1970s. Here is how they position their pricing on their FAQ:

Why are TOM BIHN bags so expensive?

TOM BIHN bags are carefully constructed of fine quality materials and components in our own Seattle factory. They’d be less expensive if we had them produced in China or Vietnam, but then we’d lose control over the quality of the finished product and the quality of the jobs we create. Our turn-around time (the time between designing a new product and being able to ship it to customers) is quite fast, especially for a small company. We could use cheaper materials, but we’ve been making bags for a long time and plan to make them for a lot longer still: we don’t want folks complaining about this or that part breaking or wearing out prematurely. There are plenty of less expensive products on the market and it’s up to you, the consumer, to decide if the quality of our products justifies their expense.

Why are TOM BIHN bags so cheap?

So now that you know what goes into our products, you might wonder why they aren’t even more expensive. First of all, we sell almost exclusively to the end consumer, so there is no wholesale-to-retail markup: you buy directly from the factory. Second, we are a lean little company: we are not top-heavy with vice presidents, nor are we traded publicly. We are a museum-quality example of human-scale capitalism: we make stuff and sell it to people.

See what happened there? They not only explained why they are “so expensive,” they addressed “why aren’t you MORE expensive?” It’s a great way to show value and justify price at the same time. It feels open, honest and transparent, and at the same time deftly justifies a healthy price.