Cast a fresh
eye at your product pricing strategy and marketing - Part 2
Think About Your Product Value
by Molly Gordon, MCC
Here are some of the things I've learned and that I credit
with supporting my own successful pricing strategy and marketing my products
and services:
1. If
our pricing strategy doesn't allow us to charge enough for our
labor, we eventually get burned out and/or resentful.
2. When we do not charge the
price that our hearts fell the work is worth, something in us feels
"less than." It's an energy leak, and it can feel really crummy
when you are leaking energy and trying to be a good person by not "taking
advantage" of your customers.
3. When we take the time and
care to be really skillful and well informed about our craft (and I
know from what I read that many of you do this), we are responsible
not just for compensating ourselves for direct labor but for earning
enough money that we can continue to learn, grown, and refine our expertise.
It costs money to buy books and magazines, to go to workshops. It takes
time to research your raw materials, and if you do not consider that
time in your pricing, you run the risk of running yourself ragged. Your
pricing strategy should bring in enough money from each sale of a product
that your business "pays" for all those hours learning and
sourcing.
4. If we do not charge enough
for our products, it can be easy for customers to miss the true product
value. Price gets people's attention. You may think that is cheesy.
I don't have an opinion about that. I just know that it's often the
case.
5. What you believe about what
you can charge (and get) is the biggest single factor in whether or
not customers will be happy to pay your prices.
Let me say a bit about Number 5, because it is, in my experience, absolutely
true and yet very hard for artisans to understand. Here's why it is true:
-- If a customer does not understand the
true value of your product or doesn't care
about it, neither a high price nor a low
price will convince them to buy it.
-- If a customer does appreciate
and value your product, they will not be offended by a price that
exceeds their budget. Disappointed, yes, but offended? No. The person
who is offended doesn't truly understand what you are selling. Educate
them (if they want to be educated) or simply bless them and let them go.
-- There are two kinds of products: commodities and specialties.
A commodity is a product that gets the job done. Bulk laundry detergent.
Generic oatmeal. When we shop for commodities, price matters. Why would
I pay $3 a pound for essentially the same laundry detergent I can get
for $.50 a pound?
A specialty is a product that offers a value
above and beyond the basic utility of the product. My husband is the more
frugal one in the family, and he does the grocery shopping so that we
don't go broke from my fascination with candles or exotic spices or whatever.
He is the one who first bought organic produce, and when we tasted the
difference, it became our first choice. It's often quite a bit more expensive,
but the product value added by virtue of
it being organic -- a value we can actually taste and feel in our bodies
-- makes the higher price well worth paying.
Back to laundry detergent. This is not an item I would
usually splurge on, however I discovered a natural, lavender scented,
biodegradable detergent that is just so delicious. It leaves the faintest,
clearest scent of lavender on the laundry, I just love it. I usually combine
it with another natural detergent that is somewhat less expensive so that
the overall cost is lower than if I only used the lavender stuff. Do I
resent paying more for the yummy stuff? NO! I am proud to contribute to
the success of a company that is creating such a lovely product. I want
them to succeed.
Are you selling specialties? Then pricing strategy
and marketing should be driven by true value of your product or service
to the customer, not the manufacturing cost.
Next article:
Cast a
fresh eye at your product pricing strategy and marketing - Part 3:
Price and perceived value
* * *
 Learn
more about Authentic Promotion - a comprehensive small
business marketing resource that turns marketing and self promotion into
a path of increasing self-awareness, authenticity, and right livelihood.
In particular, the pricing strategies you learn to apply will build the
solid foundation for your authentic prosperity as an entrepreneur.
* * *
Contact an acknowledged expert
on small business marketing Molly Gordon at:
Shaboom Inc. Life could be a dream…
PO Box 195
Suquamish, WA 98392-0195
mgordon@authenticpromotion.com
As a business coach and small
business marketing consultant, Molly Gordon, MCC, is available in Greater
Seattle Area and internationally |
