Tuesday, January 29, 2008

Price is a metaphor for trust

Chances are, the higher the price, the more expectations you have regarding variables like quality, status, workmanship, reliability …and the more you spend the higher your expectations.

If you spend $2 on a rope ladder you may not be too surprised when it breaks. If you spend $2,000 you are boiling hot angry if it breaks!

Price is a metaphor for trust. Price reflects how much you expect a product or company to deliver on quality issues. Price reflects how much you trust them to keep their word. Price is a metaphor for trust when it comes to service contracts, up grades, follow-up and guarantees.

Here’s an example: The other day I set off to buy THE BEST IRON MONEY CAN BUY. The iron we were currently using had just peed water all over the place. Its predecessor was chucked in the rubbish when it developed a leak and the one before that was replaced because it didn’t press creases firmly enough.

We’ve had a succession of irons that have each lasted around two years and then for one reason or another given up the ghost.I stood before a shelf of irons that ranged in price from $29.95 to $149.95 and to be honest there was little to tell them apart. To simplify the choice I chose only the biggest, heaviest models that looked like they could iron a decent crease. Then, deciding to eliminate a few more, I compared only the range of Teflon coated irons. This left me 9 irons from which to choose. Needing help I called the sales woman over and asked her which iron was THE BEST IRON MONEY COULD BUY. And guess what -- she didn’t know.

She couldn’t give me a single good reason for buying the most expensive iron; in fact, she told me they all would do the same job so I opted for a $49.95 iron.

Why waste $100 when you don’t need to?

If she could have given me a single reason to believe the most expensive iron would do a better job, or last longer, I would have bought it – but no! I didn’t trust the $149.95 iron to be any better. Price is a metaphor for trust.

©2008 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com

Jane Francis is available as a Professional Speaker, Coach and Workshop Leader to help sales teams and companies pitch and present their price with creativity and confidence. More info available at www.pricetalks.co.nz

Sunday, January 06, 2008

A New Year's Resolution?

There's a joke going around the internet that goes like this:
A printer says to his client, ‘Thank you, Mr Brown, for your business. I wish I had twenty customers like you.’
'Gosh, it's nice to hear you say that, but I'm kind of surprised,’ says Mr Brown, ‘because I argue over every bill and I always pay late.’
The printer replies, ‘That’s true. But I'd still like twenty customers like you. My problem is: I have two hundred.’

How well are you monitoring your customers’ impact on profitability? How well are you tracking the time spent on each customer and the return you get from that? Is it possible you have customers you would be better off without? Why not dump them? Or at the very least give them one last chance to shape up or ship out. It's the New Year after all, and it could be the best resolution you ever made!

©2008 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com