How to Get Smart About Raising Prices

All shoppers love a good deal. But when it comes to jewelry, a consumer category famous for its broad price variances, a bona fide bargain is a relative thing. And jewelers looking to raise prices—and get off the discount merry-go-round for good—need to implement smart strategies to help their customers understand the concepts of value and investment.

Discuss the intrinsic value of a piece of jewelry.
“If you describe to the buyer why the price is the way it is, they’ll usually agree with you,” says Derek Halpern, founder of marketing consultancy Social Triggers. This may include a brief discussion of the value of the materials used: “You can say something as simple as, ‘Sure, there are cheaper options, but we want to focus on our quality.’ ”

A good story goes a long way.
Jewelers “need to emphasize what makes their jewelry special,” says Halpern. “I recently bought pearl earrings for my girlfriend, and I ended up spending a decent amount of money because the saleswoman explained where the pearls came from. People are willing to pay a premium for the story.” Adds Stefania Pinton, a consultant and partner at Dionco Inc.: “A local designer or unique story can justify a higher price.”

Customer education is key.
“It really is a matter of teaching the customer the importance of investment,” says Pinton. “The more value you can communicate and address, the more positive the response to slightly higher prices.” In short, it’s about distinguishing between cost and price. “Price is what you pay today,” says Pinton. “Cost is what you pay over time.”

Add value to the product.
“Don’t do a sale by doing 50 percent off,” says Halpern. “Do it by saying, ‘The cost is $500 and we’ll also give you one year of free cleaning if you buy in the next seven days.’ ”

Try packaging multiple items together.
“Sometimes packaging different items as a complete solution, and pricing it accordingly as a deal, is appealing,” Pinton says. “They’re not comparing the price of the individual item because now they have a bundle.”

A version of this story originally appeared in the October 2013 issue of JCK magazine.

(Mlenny Photography/Getty Images)