The Pricing Masters... an intensive
5-Day e-mail course on
finding the Perfect Price that will
maximize your profit.
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
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
Fri Feb 02 01:21:36 2001
Pricing Masters Course 404
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....
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.
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
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
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?
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. ;-)
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.
I said on Day 1, misjudging your
price points in this
digital era costs dramatically more
than it did in the past.
markets mature rapidly. You have
to be prepared to
adjust pricing frequently or upgrade
your product/service to
maintain your price. Price is never
what do you do?
the e-commerce equation right...
Product + Perfect Price + Satisfied
*SUCCESS*. A lifetime of success,
buyer decides if the price is acceptable
the benefits of the product and
by considering 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
say that Product X costs you $20
to make, market,
sell, and distribute. But letUs
say that your customer is
only willing to exchange $10 for
equation is definitely "off
the rails" and will stay
there, permanently, unless some
major modifications are made.
Knocks" life lesson learned
by this experience? The
most important determinant of price
is *always* what the
product is worth to the customer.
This is the beauty of the MYPS!
survey with its integrated
server-side statistical analysis.
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.
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
in it for me?"
where an effective Web site is absolutely
A great site educates the customer
about your product's
benefits and features. It builds
example, if you are going for a
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.
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?
you can't afford not to keep "tweaking"
periodically. Market conditions
you need to upgrade your product
competitor has come up with an interesting
angle. Or you
need to counter-attack a mature
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.
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
next reality lesson on the blackboard
guess. Be accurate!
theoretical price for your product
may look reasonable and
saleable on that fancy spreadsheet
or after a discussion
with your hired pricing consultant.
it might be totally off-base to
"personal" prices. And
if it doesn't jive then you might
well leave the dance hall.
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*
That's the price where your customer
starts to think...
don't need that as much as I thought
brings us to a critical concept
that we call the
TEETER POINT (tm). ItUs that price
at which the consumer
just canUt make up his mind. Basically,
itUs a 50-50
proposition -- the credit card could
stay out or it could be
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.
you can't wait, feel free to visit
the MYPS! site now...
order to identify this powerful
point of consumer
decision-making, you have to *know*
your customers. The
*ideal customer profile* would highlight...
their assessment of your product
in terms of importance
their buying habits
their average monthly expenditure
on similar products
their ability to find your competitors
their point-of-resistance to a sale
great, but where or how do you access
that kind of
private information? Lesson number
three... Life has its
fair share of challenges.
is your starting point for today's
Write down the answers to the first
four questions (we'll
refer to them tomorrow)...
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?
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?
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
How would you rate your Web site
for "Builds Perceived
Value"? How often do you revisit
your site for adjustments?
Get a picture of Henry Ford and
put it on your desk with
a yellow Post-it note...
to the customer... s/he has all
the answers." :-)
day tomorrow. See you then.
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Contact info: E-mail us at [email protected]
Written by Ken Evoy, M.D.
(c) copyright 2000, 2001 SiteSell.com
Perfect Price and Teeter TM GoodBytes.