“Any customer can have a car painted any color that he wants so long as it is black.”
-- Henry Ford (1922)
Clearly, Mr. Ford felt that he controlled the car market... to the point of disdain for the desires of his customers. Think about this for a second.... Henry Ford knew his customers wanted their cars in other colors. Yet he felt that he had such a lock on the market place that there was just no need to listen to them.
Ford went on to lose serious market share to “upstarts” like General Motors. That’s why Bill Gates keeps a picture of Henry Ford on the wall of his office... an object lesson of “fatal attitude.”
Mr. Ford ignored customers when it came to one of the big P’s... Product. Do you think he listened to them when it came to Pricing? I’m sure he never asked!
Do the majority of business owners have that enviable position today? Sadly, no -- we all work in a hyper-competitive market place. Yet how may owners ask their customers for input about perceived value (i.e., what it’s worth to them) and pricing? Do you?
This is a “reality check” chapter. Get ready to plant your feet squarely on the ground... and set those rose-colored glasses aside for the time being. Most business people don’t need those glasses anyway.
Why?...When it comes to pricing, their heads are firmly embedded underground.
Profit. You have to make a profit or you won’t survive. The right price is critical to your commercial future. As I said in the Introduction, pricing is your most important marketing decision.
Misjudging your price points in this digital era costs dramatically more than it did in the past. Internet markets mature rapidly. You have to be prepared to adjust pricing frequently or upgrade your product/service to maintain your price. Price is never static.
Get the e-commerce success equation right!… Great Product + Perfect Price + Right Process = Satisfied Customer + Success A lifetime of e-commerce success, that is.
Most small businesses fail on the Net because they prepare to sell and collect money, before they have provided what their visitors are searching for... information.
Wrong thinking... wrong process. It’s like pushing a string. You have to pull instead... pull targeted visitors into your site, PREsell them... then, and only then, monetize your site.
The “right process” boils down to four simple steps...4) Convert traffic to dollars (whatever that monetization model may be... selling hard goods, e-goods, services, or representing affiliate programs, or setting up a finder’s fee relationship, or joining Google Adsense program, etc.).
Right thinking... right process... profitable results!SBI! provides all the necessary tools (all-in-one-place) and step-by-step guidance so that you can follow the right process, regardless of your experience or technical background.
http://buildit.sitesell.com/
A buyer decides if the price is acceptable by determining the benefits of the product and by considering the competition.
The seller prices to maximize profit, while considering the bigger picture business model (i.e., high price/low volume or low price/high volume). The price must pay for the cost of production, marketing and overhead costs, and still make a profit.
This success equation is definitely “off the rails” at this point and will stay there, permanently, unless some major modifications are made.
Bottom line?
The most important determinant of price is always what the product is worth to the customer.
Before your prospective customer can tell you what your product is worth, she must understand what it will do for her. So you must be able to answer the question...
“What’s in it for me?”That's where an effective Web site is absolutely necessary. A great site educates the customer about your product’s benefits and features. It builds perceived value.
Want to see some “live” benefit-focused content? Check out one of the following sites (or all three if you are keen)…Benefits for information publishers… http://infopublishing.sitesell.com/
Benefits for network marketers... http://networkmarketing.sitesell.com/
Benefits for local business owners … http://localbiz.sitesell.com/
Same product. Different benefits. All customer-focused!
Features are elements of a product (or service) that do, or that are. Benefits are the results that do for your customer. They connect at an emotional level by delivering a gain or curing a pain.
All benefits add to the perceived value of your product or service. The higher the perceived value, the greater the chance you have for a sale (or a download, or a subscription, or a contract, or whatever is your Most Wanted Response (MWR) - i.e., whatever you most want your customers to do when they are on your site).
So… figure out your target group. Who is most likely to see the benefits of your product immediately? Do the words on your Web site reflect that awareness? Picture your customer. Now write for your customer. Thinking of a single person automatically helps your copy feel “one-to-one” as you write. If you think of thousands of people as you write, your copy will take on an impersonal, broadcast tone. You know your customer best so talk to him or her!
Jim Nelson, an SBI! site owner, knows his target group well. Visit his site and see how he builds trust and credibility by what he says and how he says it …http://www.jugglenow.com/
Bottom line?
Your site not only has to get the sale, it has to build perceived value in your product. When the customer “gets it,” both the perceived value and the Conversion Rates will be high.
Only benefits answer the critical question... "What's in it for me?"
Now for the next “reality” lesson of the day... A theoretical price for your product may look reasonable and saleable on that fancy spreadsheet or after a discussion with your hired pricing consultant. But it might be totally off-base to your customers’ personal prices. And if it doesn’t jive then you might as well leave the dance hall.
You have got to know confidently at which price point your customers are thinking... “Yes, this is worth it.” Or conversely, at which point priceresistance kicks in. That’s the price where your customer starts to think... “I don't need that as much as I thought I did.”
This discussion brings us to a critical concept that Make Your Price Sell! calls the Teeter Point. It’s that price at which the consumer just can’t make up his mind. Basically, it’s a 50-50 proposition -- the credit card could stay out or it could be put away.
MYPS! develops a line graph that will show you clearly where this Teeter Point is for your visitors-not-yet-customers. http://myps.sitesell.com/
How well you identify this powerful point of consumer decision-making depends on how well you know your customers -- what their needs are… what gains they want to achieve… what pain they want to eliminate.
Not sure how well you know your targeted market… or how well you let them know that you understand them?
1) What method do you use to get to know your customer? How do you know what they think about your product, its price, and your competitors? Have you ever used an e-mail survey? Do you have a regular scheduled e-zine that has a feedback section? Have you tried contacting your customers by phone?
Always wanted to publish your own e-zine? Run an online survey? Or are you feeling a bit intimidated or overwhelmed by the whole idea? Site Build It! helps you produce/publish/manage a professional e-zine, conduct a survey, etc., all in a hassle-free way. All the tools and guidance you need are provided. Everything is presented in an uncomplicated, easy-to-understand way.
http://buildit.sitesell.com/
2) Does your site “fit” with your customer profile? Will it effectively attract (“flag”) your customers? Does it provide the type of information they are seeking? 3) How would you rate your Web site for “Builds Perceived Value”? Will your customers be able to clearly answer the “What’s in it for me?” question? Or do you concentrate more on features than “benefits.”
Everything in business should be customer-focused, including how you price your product.Do what I do. Get a picture of Henry Ford and put it on your desk with a yellow Post-it note... “Listen to the customer... s/he has all the answers.”
Your customer’s perceived value of your product or service will determine whether s/he pulls out the credit card or not. A high perceived value is more than an important consideration…
