Guy Richards / Ordinary Life with a Brand Strategist

Desire is more important than size

Houses are priced by size, but quickly increase or decrease depending on the property they’re built on.

It’s the same with fashion, technology, machinery and anything else that can be traded, stolen, sold or bought.

The key is to define the desire of your market. Then continually push the innovation of your offerings to keep the desire around what you sell.

Value Increases Through Experience

Rarely do people start off purchasing the best BMW. They first buy a lower end model and as they “mentally buy into” the brand, they upgrade. (Unless you are like my friend Angelo Pericci who buys the top of the line everything.)

But for the most part people will spend their money on what they emotionally find value in, even if it’s not a tangible item.

Apple has the Mini mac (entry level), Mac Pro (mid level) and the Xserve (top end). My local ice cream stand has plain cones (entry level), Blizzards (mid level) and banana splits (top end).

$$$ are you crazy?

I was looking at a dirtbike at a yard sale this weekend. It was priced so high I didn’t care to look at anything else in the yard because I figured that would be priced high too.

What is the first product/service you sell that your market notices? How does the pricing compare to your competitors? Does that turn your market off about everything else you do?

Price It In The Basement

Price is a great conversation starter. I have been helping a friend who launched a small retail shop. His challenge is to become known in his area, but he doesn’t have the money to take the traditional approach (commercials, direct mail, large events, etc.).

Money or no money, he does have two things, product that people want and brands that other retailers in his area are selling.

So in theory, if he can sell the high demand products for dramatically less it will get people talking in a positive way about the great pricing. Which will increase his chances of people braving the unknown to check him out.

I have been pushing him to sell certain products at cost and keep the rest a little lower than retail, while he’s in startup mode. Isn’t it true, when a 50% sale happens, people talk about it? Especially when it’s on $300 and $400 items.

The owner offered my family and friends wholesale pricing on this years snowboard apparel. This naturally excited me. Out of the 5-6 people I offered it to, 1 person took me up on it and spent a couple hundred dollars. This created a purchase from someone who was not even considering it. But more importantly, everyone in my circle is buzzing about this little retail shop and I’m just one person.

As data tells the progression of a sale; first comes positive talk, then comes positive perception and then comes purchases.

The Glass Sales Pitch

I received a call from a company that sets up networking meetings between brand development firms and large brands looking to hire.

The sales guy told me that we (Abiah) were hand selected by a team of experts that believe we are a great match for this group of brands. He went on to explain how successful this opportunity would be for us (Abiah).

Then he revealed the cost, $35,000.  He backed it up by explaining how each brand had at least $100 million in sales, $5 million for marketing and has signed an agreement to launch 4 new projects in the next 9 months.

It didn’t make much sense to me because I know I would have to compete with a lot larger staffed organizations. And in my experience, the more bodies in the office equal a higher level of confidence to mega corporate brands.

I thought about it and said to the sales guy, “If you are so confident that I would be successful at your event, would you work out an agreement with me to only pay you if I win a contract? I’m willing to pay you $70,000 (twice what you want) assuming I win a contract.”

Needless to say he declined. Funny how some people are so confident you will succeed until they are asked to put their money where their mouth is. If this sales guy was so confident that I would succeed he would of at least told me he would ask his manager.

I guess it was all just talk.

Strategic Pricing

I was talking to a printer a few days ago for about a job we were doing. While I had him on the phone I asked him to ball park another job for me.

That’s when the “brace yourself” dialog started. He proceed to tell me how the print industry is currently running at about 94% capacity and that the paper manufactures have been putting out communications to the printers that prices will increase due to the stimulus bill. (Think of all the paper that has to be printed for the billions being lent.)

The print industry won’t be the only one raising prices. Keep an eye out for areas where demand will rise. Because there you will see the price tags follow suite. 

Talk soon