Are we now in the Pricing “Land of the Free”?
Do we now expect everything for free? It is one of the areas of marketing that I feel is very important to cover. The thought struck me as I was preparing for a seminar I was running locally this week on “Confident Pricing for Small to Medium Size Businesses”,
Land of the Free
With the current supermarket price wars you see BOGOF offers, (Buy One Get One Free), Buy One Get Two Free, Buy Three for £10, Buy Two Get One Half Price and a zillion other versions of this, everywhere! It’s as if we’re being trained, or brainwashed, to never expect to pay the list price for anything. In the UK, there’s also a particular sofa store (you all know which one!) where there’s a permanent sale on. This means that their stated original prices have no credibility at all!
Brands that traditionally would never be seen to price cut are now constantly on offer as they compete for prime supermarket shelf space. Another example is the brand of coffee I purchase. I can be fairly confident that it will be at a substantial discount (around 25%) in at least one of the supermarket chains at any time. Alternatively, I can buy two on the offer from the supermarket I usually shop in as, by the time I’ve used them, the offer has come around again. Like Pavlov’s dogs, I’ve now been conditioned to respond to this form of discount.We all must realise that FREE or cheap is not without cost!! Click To Tweet
Coincidentally this week McBride, an own-label manufacturing company that I used to work for in my dim and distant past, announced that it is cutting its workforce by 25%, a loss of 400 UK jobs. The review was triggered by worsening conditions in the UK retail sector and the level of brand price discounting in supermarkets.
Is this human discount of free too high a price to pay?
The internet is also littered with free offers – training, videos, reports, and webinars. These are all part of the armoury of the internet marketer and are available for consumption. One of our Pricing Seminar attendees said that they didn’t like Facebook anymore as “they want to charge you for everything”. I felt it was fair to point out that Facebook is a business and unless they make a return, it will disappear as other “free” social media networks have. My intention wasn’t to defend Facebook and its current strategy but merely to point out an economic reality.
Our seminar did cover how you can use ‘free’ as an effective strategy but you do need to make sure you have three important elements in place:
- A compelling free offer
- A controlled environment
- A robust marketing system.
Home of the Brave
The point of our Pricing Seminar is to encourage attendees to enter the “Home of the Brave”. We cover this in three steps:
Step one – Kate Kelly, the Business Plumber – looks at your business processes. Have you calculated the cost of all the work you do? Are you making a profit with your current pricing? Should you charge more?
Step two – my contribution – looks at your marketing. Who buys your product or your service? Who would you like to have as customers? What are you doing to reach them? Where do they hang out? I talk about coffee and knickers! And how you can change the perception of a commodity product by focusing on your target market.
Step three is all about confidence – and that’s where Kate Patterson of The Hypno Clinic comes in. Kate is an accredited Thrive Programme Consultant, a qualified hypnotherapist and a psychotherapist. She looks at having the right mindset – and the right attitude – to charge what you’re really worth.
In their book “No B.S. Price Strategy”, Dan Kennedy and Jason Marrs state clearly that there are two chains that bind products to price. One is in your customer’s mind and the other is in your mind. They both have to be broken and your chain is almost certainly stronger than your customers!
I invite you to join our now hopefully converted attendees and leave the “Land of the Free” to enter the “Home of the Brave”!