This week – in case you’ve been living on the moon, or aren’t based in the UK – we’ve been melting under the blue skies and scorching sun of a heat wave. Tuesday night was the hottest night on record since 1948; I don’t suppose that I was the only one who didn’t get a great night’s sleep because I couldn’t cool down.
When it gets to that level of heat, in this country we can’t cope with it and we’re not set out to deal with it. What we want, with a fair amount of immediacy, is a way of cooling down. Sales of fans and air conditioning units will no doubt have gone through the roof over the past few days. Sales of bottled water, ice creams and paddling pools would all have gone the same way.
Imagine you are hotter than you’ve ever been before then (which shouldn’t be too hard given our experience this past few days). Imagine that you can’t sleep and that you’re desperate to cool down. You’re tossing and turning. You’re uncomfortable. You’ve opened the windows as wide as they will go AND opened the curtains and you still can’t get the cool night air to hit you’re burning body. Mainly because there IS no cool night air.
What’s hot on your list (pun very much intended!) of things to buy the following day? A fan? An air conditioning unit? What would you pay for that?
Now here’s where the interest lies. If you bought a fan in the middle of May, when the weather was still cool, then you’d probably look for the cheapest available. Get to the point of mid July when you’re now desperate for one, and the price you’ll pay is very likely to go up in your efforts to remain cool. Desperation wins over any earlier price sensitivity.
Let’s change topic. Have you ever had the misfortune of pulling a muscle or “doing something” to your back? You know how much that hurts. Having your back, or any part of your body actually, put out of sync so that you end up in a lot of pain is miserable and debilitating. And when you’re in that much pain, what would you pay at that point to have an osteopath or chiropractor fix it for you? How often have you said through gritted teeth, “I don’t care how much it costs, just make the pain go away”?
Moving away from pain and agony, what about the nicer side of life? What’s your favourite past-time or hobby? How much do you spend on it? (Be honest now!). As I’ve mentioned before in these newsletters, I love to sew. So much so that I signed up to do a City and Guilds Design course in the subject earlier this year (a three year commitment). And I, along with every single one of my fellow sewers, buy fabric and a whole variety of gadgets because we love it. If we’re making an item that needs the perfect piece of fabric, we will hunt high and low for it, and will think nothing of shipping it in from the US if needs be. The price of the fabric just doesn’t come into the equation. (Granted, I do keep a cap on my fabric expenditure otherwise my children are unlikely to get fed).
What about buying things to fix a problem you may have? Want a new TV? New phone? New laptop? New sofa? They’re all there to serve a purpose, and you may have a budget in mind. But…..when you get to the shops, and you’re in buying mode, and fawning over the loveliest newest, shiniest TV/phone/laptop/sofa you’ve ever seen, you will happily justify additional spend to yourself to get the things that you want the most.
Why is it then that so many business owners panic about the pricing for their own services, and end up pricing far too low, scared of losing out to the competition?
Getting the pricing right for your preferred target market is a vital element of the marketing mix (the 4 P’s). However, you have every right to cost your products and service appropriately AND make a profit. The official definition of marketing actually states that you should make a profit.
If you sell services, what you need to focus on is the value that your clients get from working with you. What problem are you solving for them? What are they trying to achieve, that they can’t achieve without your help?
If you sell products, again what problem are you solving for them? Or what are their needs and desires? What do they want to make them feel good or that they will enjoy owning? Apple have this completely nailed down…essentially the same functionality as any other computer or phone, but through making the user experience so much nicer, they charge a premium, don’t budge on price…and everyone just excepts it.
Pricing has so much to do with the psychology of your clients and customers and how they will feel once they have bought whatever it is that you’re selling. There are also different levels of perception on the quality of the products or service offered depending on the price of it. Too low and your prospective customer will think it’s low quality. Too high and…well, possibly you’re aiming the wrong target market. No matter what your fee or price, there are clients and customers out there who will be prepared to pay it.
I think pricing also has a lot to do with your own psychology and making sure that you have a pricing strategy that makes you feel good, ensures that you don’t feel hard done by and resentful, and ensure that you can pay for the life that you want to live.
Be proud of what you sell and price accordingly.
And if you are struggling with your pricing, then do book yourself in for a free Marketing Insight Session for immediate guidance.
Have a great week,