Tag Archives: pricing

Is Your Price Point killing Sales?

2 Jan

Is Your Price Point killing Sales?

Sales are the heart of your business 9 out of 10 times. Bloggers and a few other specific businesses may sell indirectly or not at all. So working from this premise we can assume that you want to sell product consistently and repetitively (we all want customers to come back).
Assuming you want long term cash flow and growth and you aren’t looking for a one hit wonder.
We will also assume your product is killer, has good branding, marketing, and social media presence.
So all of those factors being declared let’s look at a factor a lot of up and coming entrepreneurs overlook, the price point.

A quality product or service has to have a proper price point as well or you risk eroding your profits.

Priced too high.
When you price your product too high you may miss your target audience. Indeed the very people you want to buy or benefit from what you offer may not be participants. This is where knowing your key demographics comes in handy. Data is always your best friend even if its implications appear negative. Let’s say guy X wants his tee shirt line to sell for 35 dollars a piece. Now data shows us people pay way more, 5 times as much in some cases. However you have to have the immersion, the marketing, and PR to make it work. Not to mention the distribution channels and so forth.
Guy Y on the other hand only wants a small profit and undercuts guy X by 10-15 dollars a tee shirt. In this economy especially he may beat guy X. Also at that price point people may buy 2 for 1 which is only a few bucks more. His lower price point has created new price points and may yield greater sales. If 5 dollars more buys an additional tee many people will opt for that deal. Have we not doubled sales on average? I’d say that all factors being equal we probably have.
If we look at the Kardashians we see proof of this. Their mainstream line is at sears and priced to sell. It is not on rodeo drive or 5th Avenue. This is simply to maximize profits. When you appeal to the mainstream you open yourself up to a greater amount of potential clients.

Priced too low.
The opposite can be said as well my friends. If Honda dropped their flagship Accord Model 13,000 dollars people would stop and think. Most would worry. As an Accord owner twice over I know that I pay a premium for value. The Honda brand is synonymous with quality and reliability. To under price that would gut their brand. It all comes down to value. You have to offer it to get fans and customers. But you have to value what you offer and what you create. Establish this before you go to print or sign deals.
Often we get what we expect and if you expect too little you will be little

#thriveorsurvive.

“High achievement always takes place in the framework of high expectation.”
-Charles Kettering

Thoughts? Concerns?
Questions? Think I’m wrong?
Let’s chat.
Need ideas?
Want to learn how to invite?
Let’s chat.
Want a mentor or maybe the guy who will bounce ideas back and forth with you?
Let’s chat-
Tony@Changeinadvance.com
@changeinadvance
http://www.changeinadvance.com
Or simply reply to this article.

Lessons from the movie Paid In Full.

27 Jul

Lessons from the movie Paid In Full.

So I’m in a waiting room after a back injury and was discussing the movie Paid in Full with a colleague and while its a ‘hood movie’, or a ‘drug movie’- I found some great points for any business person.
The protagonist whose moniker is Ace has an unusual way of doing business and leading. At least in comparison to his peers.

-Keep pricing down.
In any business if your clientele and partners can purchase at a lower cost your average goes up.
I was part of a business that required me to buy product monthly for consumption or to give away. Now the product was great- is great. Top notch. But the problem I had was that the costs were high and then they went up! And I couldn’t convince people to buy my product. Oh I had some sales and didn’t walk away bankrupt. But the costs were extreme. And you can easily say- Tony you failed there not them. And you might be right. However if the product was a better value for the dollar I think I would have believed in it more and my customers would have bought more and been more numerous. The lesson here is simple- if your product can’t be moved in your market at the desired price- lower it. Now you may not be able too, but if you can do it. Ever notice that Old Navy and Gap inc always have sales? Or how about Honda and Toyota? Both product types are in demand. Both offer quality products. However sale pricing closes the deal. In a psych-sales/marketing class the teacher spoke on how the $19.99 pricing of a unit could lead to a 30% profit margin over the similarly priced $20.00 unit. You see, the sale price is akin to a fish hook covered in tasty bait. That one penny difference not only lures them in but seals the deal.
In the Movie ACE sold a higher quality. product and at a cheaper price. This enabled him to move product faster and satisfy his consumer base. He also benefited by having his money in hand faster and being able to buy more product faster. Also the faster you can profit the more you can minimize your risks and increase value to clients.

-More importantly keep cost down.
Now if your product is cheaper than your competitors your advantage is astronomical. And when marketed it right sales will grow exponentially. In the movie ACE purchased a higher quantity of “merchandise” at a time which enabled him to make a larger profit easier. What’s even more amazing was that since he was in essence buying wholesale he could lower his price and still make a killing. Remember profits are made wen you buy not when you sell. That applies to buying homes, flipping homes and cars and even signing contracts. Ill let you figure how the last one applies ;).
—-

-Share the wealth.
Profit sharing can have enormous implications when related to sales, profit, loyalty and growth. Now you can keep 80% of your profits and see what happens. After costs you might have 2% left to pay employees and partners. And I don’t know about you but I won’t bust my hump for peanuts- especially for your dream and not mine. See that’s a normal human reaction. Even if I give you a 110%, eventually someone else will see my caliber and snatch me up. This is avoided by either profit sharing and or paying an exceptional wage. People who are paid what they are worth or more will give more. In the movie ACE worked this out by not cutting out his competition. He made it possible for everyone to ‘eat.’. Every individual who wanted in was in. Everyone looking to cash in- DID. Your team will work. But pay them like family and you all win. Disagree? Email me.

-Share the power.
ACE shared power with friends and confidants. He didn’t rule Nazi wild style. People were given rolls and responsibilities. While ACE was top dog he had enough people whom he had given a stake too that these people kept the cogs in the machines rolling. Look at our government in the USA- there are three branches to create a balance where power is concerned. In your own business you need partners. And with these partners you may keep a majority share but when their voices don’t count they won’t care. Also in sharing power you relinquish some power but also remove a burden; a yolk is lifted from your neck. Share people. It will improve ALL results.

-Reward friends.
In business many people reach out to and or work with friends before anyone else. Now this is ideal- providing you do it right. Your friends don’t want to be slaves or butlers. They want a say, and some equality. Now here’s the tricky part- KNOW YOU. If you don’t you fail. You have to know if you can share. You have to know if you even want too. However friends deserve to be rewarded. The people who stick with you and help you build an empire must reap the rewards. Giving them this form of loyalty rewards you with theirs. And when the friends are rewarded they work harder.
In the movie ACE had a true friend in Mitch who was a hustler when ACE walked the straight and narrow. And when the tables turned and ACE was the boss he rewarded Mitch richly. Which gave him not just loyal workers but a friend for life. Now it wasn’t the materialism side that fed and freed people for ACE- it was the simple act of giving. When you reward those who are with you, everyone wins.

-Overall this movie was a ‘hood classic.’. However what people are missing is that the protagonist was able to use real business principles to succeed. He also quelled violence, saved lives and rewarded Rico the friend of Mitch. Now that dog bit the hand that fed him you might argue, but he was rewarding Rico’ loyalty to Mitch.

#thriveorsurvive.

“Lack of loyalty is one of the major causes of failure in every walk of life.” -Napoleon Hill

Thoughts? Concerns?
Questions? Think I’m wrong?
Let’s chat.
Need ideas?
Want to learn how to invite?
Let’s chat.
Want a mentor or maybe the guy who will bounce ideas back and forth with you?
Let’s chat-
Changeinadvance@gmail.com
@changeinadvance
Or simply reply to this article.

#thriveorsurvive

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