I was driving down the street when I found myself in a neighborhood embroiled in a turf war. Two arch-rivals were roadside and my car was headed right toward them.
I pulled over and got out of the car.
I had to because I have a policy that I always stop and buy lemonade when I see little kids running a lemonade stand. 🙂
But I was surprised to see it wasn’t lemonade they were selling. It was chocolate chip cookies. They were neighbors and they set up their stands right next to each other but were competing enterprises.
I walked up to the first stand and asked the young entrepreneur…
How much do your cookies cost?
She said “They’re $3.00 sir.”
Before I could respond, her competitor blurted out “Mine are just a dollar.”
[Let’s pause for a minute because you’re in this story to.]
What went through my mind in that moment is exactly what goes through your prospects minds as well.
I immediately began thinking, the second kid’s cookies must somehow be inferior.
She very well may have spent the better part of the year developing, refining, testing and perfecting her chocolate chip cookie recipe into something world class. But now she created a problem for herself. Her price is too cheap.
Too cheap? Yes. You might think having a lower priced product would get you greater market share but once a prospective customer finds out your competition actually charges more you’re sunk.
Because the issue with pricing is that much of it is based on perception.
Just like I instantly perceived the $1 cookies must be inferior quality, if you’re the lower priced option the same thing happens to you in your marketplace. At this point, it doesn’t matter what your ingredients are or how much you can “talk up” your product. The price difference creates a very clear perception that your product or service can’t possibly be as good.
Wait a minute, what about being “too expensive”?
Won’t that drive prospective customers away?
Quite the contrary.
People will purchase something more expensive because it brings more value. Not to mention the fact that you attract a better caliber of clientele. This is contingent on the fact that you can legitimately explain WHY you’re more.
Ex. Our cookies contain gourmet dark chocolate imported from Switzerland.
All of this begs the question how are you underselling yourself?
Speakin’ of pricing…
Membership to my exclusive community of leaders and entrepreneurs ain’t cheap. The price of admission is $49. a month and if you leave, you can’t come back. (Because I don’t cater to quitters.)
Why is it $49. when so many others cost less? Quite simply, because it’s worth it. My members use the strategies in that premium content to make back their investment many times over.
For this week only, I’m offering you, my readers, a free digital copy of my monthly Yesterday’s Underdog newsletter. Email john at coach bru dot com and I’ll have the secret download link sent right over to you.