 BUSINESS 4NETWORKING [Chris Cardell: Your prices and hidden messages] |
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Posted on 28th Nov 2008 at 14:03
Just got latest email update from Chris Cardell, see below. Intereresting reading. You can sign up for his newsletter here
As always, any advice like this is not necessarily appropriate for all businesses, I reproduce it below as it may be of interest to some. Interested to hear views.
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Dear XYZ
You're currently sending a very important 'hidden' message to your customers. That message is 'hidden' in your prices.
Entrepreneurs think that setting their prices is all about how much profit you can make. Of course, that's true but your prices also tell your customer something of great significance.
Your prices tell your customers how much you value yourself, your product and your service.
There's gold in those 15 words so let me repeat them:
Your prices tell your customers how much you value yourself, your product and your service.
One of the big Entrepreneur mistakes is setting your prices too low. If your prices are too low you're obviously losing money but even worse, you're doing horrendous damage to yourself and your brand.
If Mercedes, Lexus, Prada and Gucci halved their prices tomorrow and promoted the price cut with a big advertising blitz they would almost certainly boost their profits for the year. But they would also destroy their brands in one foul swoop.
Higher prices, backed by effective Marketing, send a subliminal (and sometimes not so subliminal) message to your customers that you have great confidence in yourself and what you're selling. People are drawn to such confidence and certainty. If you doubt this, go take a trip to Harrods and just watch people and their buying behaviours.
Is it possible that you're pricing yourself too low? Your customers are looking for quality and value. But they're also looking for certainty and leadership. We want to be sold to by people and businesses that have confidence in their products and services. It's true that there's a minority of the population who always want to buy at the lowest price. But there's an increasing proportion of the population for whom price is not the key criteria. If you can build a business selling to this group, your financial security is assured.
Best wishes
Chris Cardell
CardellMedia.com
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Posted on 28th Nov 2008 at 14:24
QSP
Quality
Service
Price.
It depends where your service/product is on the curve.
The closer to commodity, the more price sensitive it is.
The higher the added value/USP - (call it what you will) the more flexibility open to you.
I never sell on price , but I will always negotiate and be prepared to say no.
A lot easier to give a discount, extra value, intro offer, than to cut prices and then attempt to increase them at a later date.
Chris Slay, Director | Specialist Provider of Polish Jobs | 07977 131 389 | enquiries@skillsprovision.co.uk
Skills Provision Ltd is registered under the Gangmaster Act 2004
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Posted on 28th Nov 2008 at 16:00
Maybe so but you also have to look at your competitors and also what you offer. Our business is very competitive some of our competitors charge thousands but for that they are there longer than us. Our service offers 3 hours they are there sometimes up to 10 hours. We offer a quality product with a great service in our business there is room for all. You pays your money and you take your choice!
Dorrian
  
Visit our web site and check out our work
www.ddcarrington.co.uk
For all your photography needs
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Posted on 28th Nov 2008 at 16:56
i think there is much wisdom, and thought provoking stuff in this debate.
The issue of price is complicated, as it must factor in the market place just as Dorrian says.
People buy on various factors, and people sell on various factors. If you are selling on price, make sure you are cheap, and you will capture the price sensitive end of the market. There is nothing wrong with that.
But, if you are selling quality, build the message into your price. Because your pricing does send a message.
For example, you expect Ryanair to be cheap. You dont expect anything other than a plane ride, no crash, reasonable punctuality and a low price. You dont complain if the legroom isnt brilliant. This message is deliberate and they focus on doing what they say on the tin. They are good at it.
Get a quote for a Virgin Transatlantic flight. Immediate the price tells you to expect more. And they want you to choose them for quality first.
This is a wonderful thread, because here, in positioning our businesses and fulfilling the expectations we create is a big challenge for us. But...at least lets be thinking about it...
Paul Norman 4N North Tyneside and Oxford
Gibside Associates - a different approach
www.gibside.co.uk
Training for business with, no jargon. Consultancy that makes you think. Helping you be deliberately excellent.
Check here for training courses that might just suit you!
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Posted on 28th Nov 2008 at 17:41
Do you know, this kind of advice worries me somewhat. Not because it is necessarily right or wrong, but because it is blanket advice. Having a single simple formula for business success may be great when it comes to selling advice, but not so good when it comes to managing real businesses across a wide range of industries.
Sure, Lexus, Prada, Gucci, Harrods and the like can command a price. It is not necessarily because their product is any good, it is because they are long-established and have a pedigree. But what of Toyota (aka Lexus), TKMaxx, H Samuel etc? They never can be premium brands, but they still sell plenty. Indeed, they make conscious decisions trade off a value label.
Premium brand prices can only ever exist as part of a balanced market, where people are prepared to pay for a name. Reality says that we cannot possibly all be of that ilk (bit like pyramid scheme theory!). If we all try to position ourselves as premium brands, then most of us will be losers. To go out and start a business in today's climate with top-dollar pricing could be seen as a very bold move, but could easily prove to be reckless.
Price has to be relative to its market and it has to be relevant to that market. Being cheap within a certain part of a market may not necessarily be the same as being "cheap". Eg, if you are hungry, you can have a great filling meal at your local chippy for £5. Alternatively, you can come to HFH and spend £23.90 on 3 courses (currently on introductory offer at only £15 for the next 2 weeks!). My main local competitors will charge you £30+ for a similar product. The big difference is that they are empty and I am full. My cash flow is great, theirs is awful.
Still being here come next Easter and having the option of charging premium prices is where it's at! Being proud and doing no business is not such a good option.
January 4N Member Offers:
"DB&B for the price of B&B" or "Dinner for 2 with Free Wine" Click here for details
A Hotel for Business or Pleasure (but better for BOTH!)
01404 831278
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Posted on 28th Nov 2008 at 18:16
I'm just about the cheapest about but certainly don't consider myself rubbish. I'm proud of my brand and go miles further in job performance than most carpet cleaners and make a decent living. I don't agree with charging loads of money because you can get away with it I believe in a fair price foe a good job. MIGHTY COLIN
Professional Carpet & Upholstery Cleaning
We don't cut corners
We clean them. !!!
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Posted on 28th Nov 2008 at 18:51
Guess who is cleaning Home Farm carpets next week!
January 4N Member Offers:
"DB&B for the price of B&B" or "Dinner for 2 with Free Wine" Click here for details
A Hotel for Business or Pleasure (but better for BOTH!)
01404 831278
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Posted on 28th Nov 2008 at 18:54
week after next Steve. MIGHTY COLIN
Professional Carpet & Upholstery Cleaning
We don't cut corners
We clean them. !!!
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Posted on 28th Nov 2008 at 19:10
Quote:
week after next Steve. MIGHTY COLIN
Yeah, I know, you know, but it just didn't have the same ring to it!
January 4N Member Offers:
"DB&B for the price of B&B" or "Dinner for 2 with Free Wine" Click here for details
A Hotel for Business or Pleasure (but better for BOTH!)
01404 831278
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Posted on 28th Nov 2008 at 19:11
I agree, we offer quality photographs but can charge less because we do not have the overheads that some of our competitors have.
Dorrian
Visit our web site and check out our work
www.ddcarrington.co.uk
For all your photography needs
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Posted on 28th Nov 2008 at 19:16
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Posted on 28th Nov 2008 at 19:21
Sir Henry Royce said that too
Garry Hartley
Out and About Advertising Ltd
- Local Billboards for Local Business in the Thames Valley
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