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The Pricing Masters... an intensive 5-Day e-mail course on
finding the Perfect Price that will maximize your profit.
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If you have a friend who would benefit from taking this
course, please pass this on.Or tell that person to receive
the 5-day course by sending a blank e-mail to...
tpmsalliesunme@sitesell.net
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Refer to this course whenever you price new products and
monitor or upgrade existing ones. Print each e-mail out,
pour yourself a beverage of choice, bring along a pen to jot
down some ideas, and take it all to your favorite sofa. This
is serious stuff -- pricing makes or breaks many products.
So get into a comfortable spot for maximum learning.
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Pricing Masters Course 404
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"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
marketplace that there was just no need to listen to them.
Ford went on to lose serious market share to "upstarts" like
GM.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
Ps... 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 marketplace.Yet how may owners ask their
customers for input about perceived value and pricing?
Do you?
Day 4 of the Pricing Masters course is "reality check" day.
So, 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...
because, when it comes to pricing, their heads are firmly
embedded underground.;-)
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Profit.You have to make a profit or you won't survive. The
right price is critical to your commercial future. It *is*
your most important marketing decision.
Why?
As I said on Day 1, 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.
So, what do you do?
Get the e-commerce equation right... every time!
Great Product + Perfect Price + Satisfied Customer...
= *SUCCESS*.A lifetime of success, that is.
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.
LetÕs say that Product X costs you $20 to make, market,
sell, and distribute.But letÕs say that your customer is
only willing to exchange $10 for it.
This equation is definitely "off the rails" and will stay
there, permanently, unless some major modifications are made.
"Hard Knocks" life lesson learned by this experience? The
most important determinant of price is *always* what the
product is worth to the customer.
-----SIDEBAR-----
This is the beauty of the MYPS! survey with its integrated
server-side statistical analysis.
You learn the exact price that people are prepared to pay
for your product so that you can assess whether your product
or service is worth pursuing or not -- saving time and
money.It's income by default.
http://myps.sitesell.com
-----SIDEBAR-----
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...
ÒWhatÕs 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.
For example, if you are going for a high price/perceived
value model for your product,the Web site must reek of
money... no corners shaved.Every high-end detail must
be polished to a shine.
Figure out your target group.Who is most likely to see the
benefits of your product immediately?Does the copy on your
Web site reflect that awareness?
And, you can't afford not to keep "tweaking" your site
periodically. Market conditions demand surveillance.
Perhaps you need to upgrade your product because your
competitor has come up with an interesting angle. Or you
need to counter-attack a mature market.
What if you discover an untapped segment of the population?
Your site has to be able to capture their attention and
make that visit-to-sale conversion.
Actually, your site has to go beyond that.It not only has
to get the sale, it has to build perceived value in your
product. If the customer "gets it" (in his or her head),
both the perceived value and the Conversion Rate will be
high. Follow the principles of Make Your Site Sell! to
double perceived value *and* your Conversion Rate...
http://www.sitesell.com
--
The next reality lesson on the blackboard is...
Don't guess.Be accurate!
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 *price-resistance* kicks in.
That's the price where your customer starts to think...
"I don't need that as much as I thought I did."
Which brings us to a critical concept that we call the
TEETER POINT (tm). ItÕs that price at which the consumer
just canÕt make up his mind.Basically, itÕs a 50-50
proposition -- the credit card could stay out or it could be
put away.
-----SIDEBAR-----
MYPS! develops a line graph for you that will show you where
this Teeter Point is for your visitors-not-yet-customers.
But that's on tomorrow's agenda.
If you can't wait, feel free to visit the MYPS! site now...
http://myps.sitesell.com
-----SIDEBAR-----
In order to identify this powerful point of consumer
decision-making, you have to *know* your customers. The
*ideal customer profile* would highlight...
otheir assessment of your product in terms of importance
and impact
otheir buying habits
otheir average monthly expenditure on similar products
otheir ability to find your competitors
otheir point-of-resistance to a sale
Sounds great, but where or how do you access that kind of
private information?Lesson number three... Life has its
fair share of challenges.
This is your starting point for today's homework assignment.
Write down the answers to the first four questions (we'll
refer to them tomorrow)...
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?... E-mail? Street canvassing?
Telemarketing?
2) If you were building a customer profile, would you look
for the same things that I outlined?What would you add to
be in sync with your particular product and business?
3) Does your site "fit" with your customer profile? For
example, a site for "pioneers" (daring consumers ready to
try revolutionary new products) will differ substantially
from that aimed at a "mature market."
4) How would you rate your Web site for "Builds Perceived
Value"?How often do you revisit your site for adjustments?
5) 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." :-)
Final day tomorrow. See you then.
-Ken
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TO UNSUBSCRIBE
To unsubscribe, send a blank e-mail to...
unsubscribetpms@sitesell.net
NOTE: You must send it from the same e-mail address that is
subscribed to this 5-day course.
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Written by Ken Evoy, M.D.
President of GoodBytes Information Products Inc.
(c) copyright 2000 GoodBytes Information Products Inc.
Perfect Price and Teeter TM GoodBytes. MYPS! patent-pending.
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