Marketing From The Heart: Issue # 20

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Marketing From The Heart: Issue # 20
http://www.zerald.com
By Tom St. Louis
"The Shortest Distance Between You And Greater Profits(tm)"
June 14, 2002
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Price As Message

Almost every day I hear from business owners who are
trying to be the cheapest competitor out there. I'm
not saying that price is not a key consideration. What
I am saying is that it cuts both ways. Let me explain.

If I'm buying a commodity, I want the best deal,
period. If I'm buying a suit, on the other hand, I
wouldn't dream of buying the cheapest one out there.
In fact, the very fact that someone is offering me a
suit for a very low price tells me I should stay away.

The marketing message this edition is that the price
you offer is a key message, and in some cases THE key
message that your customers and prospects look at.
They might be making their buying decision (or
decision not to buy) based on that number.

Years ago I ran a rooming house. I had a room that had
rented for years at $325 a month or so. One month the
tenant, who was a painter, moved out. I was sad to see
her go because she was a great tenant and did good
work in that room. It was a sunny room with huge
windows all around and brick walls that reflected the
light.

For some crazy reason, after she moved out, nobody
responded to my ads. I ran it in two major
metropolitan newspapers and received no bites. It was
the same ad and price point that had worked

repeatedly in previous years. After almost three weeks
of expensive disappointment, I had a brainwave.

I changed the ad from "Sunny room in clean house.
$325." to "Brightly lit studio, $465"

The phone rang off the hook! They couldn't wait to
come over and look at it, and once they saw it, they
wanted me to take their deposits immediately. They
wanted that "studio" and if it weren't for the price
tag of $465, the message would not have gotten across.

I once read that when you are asking for a loan, if
the banker doesn't raise their eyebrows at the amount,
you probably haven't asked enough.

An Italian tailor I know once visited a rich man in
his home to try to sell him some suits. Despite his
best efforts, the prospect turned down every fabric
he was shown. My friend, at the time a recent
immigrant, was not so easily discouraged. He pulled
out a swatch of fabric and said, "I didn't show you
this one at first because it's very expensive. It
costs almost three times as much as all the others,
but it is a very special excellent fabric." The
prospect said, "Why didn't you show me that one
right away?" and ordered twelve suits!
Well, the little Italian tailor was thrilled. His
family celebrated. It was a turning point for him.

The punch line is that the prospect had already
looked at the fabric the first time around and had
not noticed it. It was not until he heard the price
that he became interested. It may seem unfair to
charge a man triple what a suit is worth. But it
was the only way to make him appreciate what would
have been an excellent suit anyway.

Value is a perception. Don't forget it. As a marketer,
you are in the business of strategically programming
and influencing perception.

So, when you go to sell a product or service, find a
price point that represents value. If you are not the

cheapest in the market and offer extraordinary value,
don't sell yourself short. Use your pricing to
communicate the value you have to offer. By under
pricing, you will mis-communicate to your market.

Bonus tip: If you are selling a product through direct
response marketing, test your prices. Sometimes a
slightly cheaper price point will drive your response
through the roof. But, sometimes the higher price will
out pull the lower one. You'll never know until you
test.

Go to issue # 21

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To speak to Tom St. Louis directly,

call 416-269-4694, 1-888-214-8314 outside Toronto.

Or e-mail: tsl@zerald.com