This blog entry could also be called “When to Sell Based on Value, Not Price” because there is an appropriate time and place for both types of marketing. It all depends on the target market you’re after, as discussed in my earlier blog entry titled How to Price an eBook. Here are a few examples, in various contexts, that I hope will help to illustrate this point more clearly…
The Food Industry:
Sometimes, when people go out for dinner, they just want a fast, cheap hamburger at a fast-food restaurant … they’re in a rush, they’re hungry, they’re craving beef, and they just want something on the go that doesn’t cost too much. Other times, those same people want to go out for dinner and enjoy a gourmet hamburger. It’s all beef, right? So why would anyone be willing to pay more for one burger than the other? It’s because sometimes they value better service and a more relaxed, enjoyable dining experience at a higher-priced restaurant. Also, that gourmet burger was prepared by a professional chef who has years of experience preparing delicious food, and that commands a higher price.
On that note, if you went out to a high-priced restaurant, expecting to purchase a gourmet burger, and that burger was priced the same as a fast-food burger … would you not question the quality of that burger?
Case in point: if you say what you’re selling is valuable, and you wish to position yourself as an expert in your field, then whatever you’re selling—whether it’s a burger or an eBook—should be priced to reflect that. The price should be consistent with the message you are trying to send; otherwise, people will question it and probably purchase elsewhere.
The Moving Industry:
You are the Director of Records Management at a large corporation that has recently acquired another company. Your job is to hire a professional mover to transfer all the newly-acquired confidential files from their current location to your offices downtown. You publish a Call for Tenders in your local newspaper to see what offers come in.
One offer comes in from a local moving company that positions itself as always having the best price. Other than that, all it has to offer is a free estimate, guaranteed delivery date, and both local and long distance relocations for businesses and/or residential clients.
A second offer comes in that is more than triple the price offered by the standard moving company. This mover positions itself as a leader in the records management industry with over 60 years’ experience in moving confidential files for all types and sizes of business clients. The primary mandate is to protect the confidentiality and integrity of every client’s files. Every employee who works for this company must undergo and pass a criminal check, plus they are all put through a rigorous training program to ensure they have a strong understanding of records management, retention, and classification schedules before they are ever allowed to touch a client’s information. Files moves can be managed in whatever way best suits the client (i.e. if it is important for the client to still be able to access these files at all times throughout the move, this can be arranged). And, finally, this mover will not only move all the records, but it will also do a file conversion at the same time so all the files from the old company are labeled in the same way files are labeled at the new company, ensuring continuity in all the information, making it easier and more efficient for employees to find it when they need it.
As the Director of Records Management at a large corporation who values confidentiality, efficiency, and continuity of information above all else, which of these movers would you be most likely to choose? (I don’t think I have to tell you this client went with the second, higher-priced mover.)
Sometimes price is the most important thing in the moving industry. But sometimes value is more important. It depends on the type of move being done. As with every other industry, it is important to know your customer before you set your price, and then make sure your marketing is consistent with that price. This will ensure you make the sale.
The Book Industry:
An aspiring author wants to self-publish an eBook and sell enough copies to make a profit. He decides to buy an eBook written by someone else on the topic to educate himself about the industry.
The first eBook he comes across costs only $5. It is titled How to Publish an eBook. He scrolls through the first couple of pages to review the content of the book and notices quite a few typos riddled throughout. The primary message of this book is that it’s easy to publish an eBook quickly and cheaply, and there’s no need to invest in a professional copy editor, designer, or proofreader to help produce it.
The second eBook he comes across costs $20, and it is titled How to Publish a Bestselling eBook. He scrolls through the first couple of pages to review the content of the book and notices how much more polished and professional this book appears. He notices, in the author bio, that this book was written by a professional writer who has over 15 years’ experience in sales, marketing, and book publishing. There is also a whole section in this book that discusses various ways to market and sell eBooks to customers.
Which book is this aspiring author going to buy? Keeping in mind that his primary goal is not only to publish an eBook but to sell enough copies to earn a decent profit, he will most likely go with the second, more expensive one. In this case, value is more important than price.
These are just three examples of times when value might be more important to a customer than price. There are many more examples … as I’m sure there are many more examples of times when price takes the lead. The point here is that it’s important to evaluate your customers—to understand what they value most—before determining how you will market your product or service to them. And once you’ve determined what your marketing strategy will be, then it is important to set your price to match that strategy. Consistency is key in this area if you wish to have success and make any sales.
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