My Mum is staying with us this week.

We picked her up on Monday from Victoria Station in Manchester and went for a walk around town in the glorious sun. 

In the afternoon we popped into “Annie's” for afternoon tea.

Now I have to admit, I'm not normally someone who pays £20 a head for a few sandwiches, cakes and a scone. But it was great to escape and enjoy the service and the décor. And the tea was good.

It reminded me of a mistake many people make when it comes to premium pricing (I know I often fall into this trap).

Typically when we think about whether we can charge a premium for our products we think about whether our audience or a significant part of it will be willing and able to pay those premium prices.

The mistake we make is assuming that willingness to pay is static.

I'm not normally willing to pay £20 a head for afternoon tea. But on a special occasion, I am.

What we need to do when it comes to premium pricing is not just think “who will be willing to pay a premium?” but also “under what circumstances will people be willing to pay a premium?”

Thinking of those circumstances will open up a much bigger pool of potential clients willing to pay a premium to us. And it will give us ways of positioning our products and services that gives them extra appeal on those occasions. 

Think about your core services. When would people be willing to pay a premium for them? How can you ensure they think of you in those circumstances? And how can you position your services to be the obvious choice in those circumstances?