ManWe have a lot of complexes about money. And also many false beliefs.
I’m going to share possibly the most important thing anyone has ever told you about money:
The price is elastic.
What do you think people consider most important when deciding to buy something? I can’t really tell you the answer to that, because it depends on the person, the product, and the reason for the purchase.
I may However, I tell you that only a small proportion of people make their decision solely or mainly based on the cheapest price. You may be skeptical, but think about it for a second and you will realize that I am right.
If everyone bought for price alone, the only clothing store would be Primark and we would all be driving Dacias (Britain’s cheapest car) and shopping in Poundland.
Do you think someone who buys a Rolls-Royce gives any consideration to the price? I can tell you now: they don’t. People who want a Rolls-Royce want one because it is a Rolls-Royce, not because they need a car to get to work or take the kids to school.
This is important to you because it means that you can also choose how to run your business. You can charge whatever you want, because “current rate” is a dangerous myth.
“But wait!” I hear you cry “All my competitors have roughly the same price range. I can’t possibly go against that, can I? “
If you can. This price equality is great for you, because you can let those sheep carry on.
Look, industry standards don’t make sense for your business.
It is very common, when starting a business, to look at what everyone else is charging. I did it. I’m sure it did, and maybe it still will.
We look at what others are charging and choose something in between. Or even near the bottom if our confidence is not where it should be.
It’s a crazy way to sell for a couple of reasons. I mean, if it came to your prices like this … most people must have done the same. Right? Which makes the prices completely arbitrary.
Dan Kennedy, marketing genius, puts it this way: “Understand that everyone else has come to their pricing decisions through the same silly process that you are now. It’s price incest, which works like normal incest – over time. , everyone gets dumber. “
So how do we set the prices? Honestly? Get a dart board, hit some numbers on it, and throw darts. See how your sales are going. Include “safe” numbers that keep you in your comfort zone … and include “I can’t charge that!” the numbers too, the ones that make your hands sweat and make you nervous.
Then go with the number the dart lands on, even if it scares you a lot.
I am being very serious here. Because … you have no competitors. It really doesn’t, and when you understand this, your business will become a lot more fun. And much more profitable.
Your business is different from others in the sense that you have you. How you structure your business, how you package your product, how you sell it, how you deliver it … all of this means you can price it differently. Makes direct comparison impossible.
Which means: you can say goodbye to price buyers!
Most business owners live in fear of prices, aren’t you one of them? A little good conscience is fine … But any business decision made out of fear is bad.
Fear leads people to unnecessarily underestimate prices, avoid raising prices on time (if at all), and ignore opportunities to sell the luxury version.
Fear leads to comparison. The comparison leads to discounts. Discounts lead to the dark side.
I’m not kidding: discounts will destroy your business if you succumb to them. I will explain how in my next article.
But first, I really want you to understand that you can choose your position. Are you Primark, John Lewis or Harrods? (If you’re not in the UK, Primark sells cheap stuff, John Lewis is mid-range, and Harrods is … well … Harrods.)
If you are Primark and happy, that’s great. As long as you’re comfortable with your positioning and it brings you closer to your goals, that’s great. I’m not judging, not everyone can be Harrods! People buy at different price levels.
My point is: you don’t I have to settle for the average and you don’t have to compete on price. In fact, you shouldn’t.
Competing on price is a dangerous game.
Really successful business owners understand this.
If you can’t be the cheapest and make that your USP, there is no benefit to being at the bottom of the barrel with the rest of the “almost cheaper” ones. That is truly garbage positioning.
So choose your position. Make a decision. Take control of your own earnings.
