This week
we want to look at an often sensitive topic with business
owners - the price of their products. In consultation with
clients over the years we have found that the most effective
marketing campaigns rarely focus on price. Business
consultant John P. Hayes shares an article that takes a look
at the price issue concern.
Small to mid-sized business people tend to think that a low
price is a good price for their products and services. "I
can't charge more," I often hear them say, "because my
competitors will undercut my price."
To which I say, "Good!"
And they say, "Huh?"
If you also said, "Huh," the rest of this training article will be helpful to you.
Take a moment and answer this question: How much should a man's
haircut cost?
Got the answer? . . . How many of you chose
(A) a number under $15?
(B) a number between $15 and $25?
(C) a number higher than $25?
If each of our subscribers answers my initial question about
the cost of a haircut, you can be sure that thousands will
have selected A, thousands will have selected B, and
thousands will have selected C.
And what does that tell you? It tells you that all
customers are not created equal!
That is such an important principle for all of us in
business to understand. Some customers are willing to pay
more than other customers for the same product or service.
Your job is to find the customers who will pay the price you
ask.
So let's
say you would cut a man's hair for $9.99. Good for you. You
have an endless number of prospects and customers. And so do
those of you who would cut a man's hair for $19.99, and the
same for those who would charge $39.99.
Want proof? I used to get my hair cut for about $12. Always
got a pretty good cut, too. But often times I'd have to wait
in line for that $12 cut because, after all, $12 is a fairly
inexpensive price to pay for a haircut and many (maybe most)
men buy haircuts by the price. Even worse, after getting my
haircut I'd have to go home and take a shower because I
couldn't work with all those teeny, itchy clippings of hair
down my back and on my shoulders. Waiting and showering
afterwards are the two things I dislike most about getting a
haircut.
Then one day, for no particular reason other than it was
convenient, I walked into a huge, stylish hair salon and
asked for a haircut. It wasn't until I was already in the
chair that I saw the price: $25! Plus a few bucks more for
my beard! Twice what I would normally pay. Ouch! But with
the stylist already at work it was too late to change my
mind, so I got my haircut.
When she was finished, the stylist gave me a warm wash
cloth. At first I looked at her as if to say, "What's that
for?" She motioned that it was for washing my face, cleaning
out my ears, washing under my neck. I tried it, and as soon
as I did I knew this was the place for me! Because of that
wash cloth, I wouldn't have to take a shower afterwards! Not
only that, the warm cloth was refreshing. So much so that I
said to myself, "This is
worth twice the money!"
I've noticed that a huge number of other men think just like
me because they're at this same salon, paying twice the
money. Meanwhile, the $12 salon that's not more than a
hundred yards from my salon is as busy as ever. Both salons
have plenty of customers. And they will continue to have
plenty of customers so long as they market their services
appropriately.
Many men would say, "You
pay HOW MUCH for a hair cut? That's ridiculous."
To which I would say, "Not all customers are created equal.
Besides, I don't get hair cuts anymore. But about once a month I do
buy a warm wash cloth!"
All customers are not created equal. Find out what they
want. Then give it to them. If you give them what they
really want, that is, if you deliver value, they'll pay your
higher price. Some (maybe many, maybe most) won't, of
course, and don't you worry about them! Let them go to your
competitor, who's working twice as hard as you, for the same
(or less) money!
As soon as you understand that all customers are not created
equal, you'll up your prices and start enjoying your
business all the more.
