From: Ortega Ogomigo
SUBJECT: One Advice My Dad Gave Me That Cracked Me Up
I had just welcomed dad from work and there he sat on the sofa in a manner I could say it is advice time.
Well, every time my dad sits like that there are different things you could predict…
Most of which is how is my business is going, advice on my reading as a medical student and of course choosing the right girl to marry.
That day, it wasn’t completely strange, but it wasn’t about ladies this time.
It neither about my school, but was on my product business. I just told my dad about a friend who is selling his product for 500 naira and my dad flipping through the pages of the book, looked at me…
And said what made me almost burst in laughter, but I got the many lessons engraved in those little words…
He said, “never price your book lower than it is now.”
When you have got value engraved in your product, I am of the opinion that, you shouldn’t price it below what it is worth especially when it is not a skimping marketing strategy.
Believe me, pricing affects perception. We almost believe high-ticket products are of good value. And low-ticket products as low value. You see, after going through my friend’s book, I felt he priced it below what the book was truly worth. It was worth at least 10 times that price.
Some people get scared that their prices will push their customers away. That they would get fewer clients.
Have you asked yourself why Lamborghini isn’t cheap?
Or Limousine? Or iPhone isn’t put at a measly price?
You see, the truth of the matter is people buy more aside from the prices. They buy comfort, relief, happiness, solution… Let’s say your product make prospects a minimum #200,000, you can sure it bet pricing it at #200 or #500 or #1000 may make you lose your prospects’ confidence. Fine you want to make it a good bargain, but if the price look really ridiculous, you may lose clients if you don’t provide logical reasons.
I believe in giving your prospects product or services they can get 10X the value of what they paid for. In that case, if you product can give clients a minimum #200,000, it is fair to price it at #20,000.
If it can give #500,000, then price it at #50,000
#50,000….. price is at #5000
Fine… the market has a say in the pricing on your products as well. But you wouldn’t, for whatever reason, like to run at a loss because of your statistics about what the market says.
Focus on value, customers are more interested in value than price. Reducing your price may also help attract customers, but it can kill your business especially if you’re focus on numbers and not margin.
Take a look at this example. A lady bought 12 apples for 600naira. She sold each apple at 40 naira. Because of this, she got several customers. She was sold out in no time.
After counting her money, she realized she made merely 480 naira.
She thought the problem was because she had not got a lot of customers and more apples. She borrowed some amount of money, bought several apples. Got several customers…
But in no time, she was in deep debt.
Pal, read the handwriting on the wall: don’t underprice your products or services. It affects the value. That was exactly what an expert (who had got my high demand book- The Faceless Selling) at a 70% discount because of my birthday. And I got the lessons.