One of my favorite personal examples of the power of pricing flexibility comes from my client who sells backup solar generators…

For a couple years after first launching his custom-designed backup solar generator, he was selling it at about $2,400 per unit.

When he’d launched, he’d looked around at all the other generators on the market, found out that was a comparable price for the capacity offered, and set his price there.

Then, because it sold well, he assumed that was a good price.

One day I’m talking to him and I question whether that’s the best price.  I proceed to run down the list of all the things that make his generator unique and compelling.  All the aspects of it that may justify a higher price.

Then, we look at all the other generators on the market on this basis.

After a few minutes of comparing prices, I suggest bumping it up to about $3,000.

No change in the generator itself.  No upgrades to justify the higher price (although there had already been a few upgrades).  Nothing besides changing the numbers in his marketing.

He tested it.

No fewer sales came in.  But he nearly doubled the per-unit profits.  Added about half a million dollars profit to his business that year, with one suggestion.

You could make the argument that solar generators are a price competitive market.  After all, there are certain aspects like wattage, that allow you to line them up next to each other and then make a comparison of price per watt or other metrics.

Here’s the thing…

Consumers will make these price comparison — unless you give them a better criteria to base their purchasing decision on…

Amazon today is doing what Walmart did to retail in the last few decades.  You can buy almost anything at Amazon, and cheaper than in most retail stores.

And, in fact, they’re raking in the cash because of it — just like Walmart before them.

But if you want to try on 15 pairs of jeans, are you going to do that at Amazon?  Absolutely not.  You’ll head out to any given number of clothing retailers to shop for jeans where the experience is better.

When your buying criteria involves trying on before you buy, local merchants beat online.

Or how about this.  My son who recently turned 5 had some birthday cash burning a hole in his pocket.  He wanted a specific Lego set.  And he wanted the experience of going to get it.

We looked on Amazon — and the price just barely fit in his budget.  We also looked on, where the price was clearly set to match Amazon.

So we went to our local Target store — to get the experience of getting it today.  My son was disappointed when the in-store price was higher than online, but relieved to find they are happy to match their online prices in-store, when asked.

Target got the business because our buying criteria involved picking it up that day.

Going back to the solar generator, we had one thing that no competitor could match.  My client had invented his generator, so he’d defined the features included.  One feature was (and still is) an aluminum casing that functions as a Faraday cage, providing protection against an electromagnetic pulse (or EMP).

A large portion of his market are concerned about a catastrophic grid failure due to either a man-made or solar EMP.  To have a feature promising ongoing power in this situation is enough to make ours the top choice of this segment of the market, almost independent of price.

By setting the buying criteria based on EMP protection, we were no longer competing against any other generator.

When you intentionally and strategically set the buying criteria, price becomes a secondary factor and you can often charge a high premium…

I love the example of Joe Polish, long before he started Genius Network and I Love Marketing, and rose to international fame…

Joe was a dead-broke carpet cleaner, living off credit cards, and actually going deeper into debt with every new carpet cleaning client he got trying to compete with other cleaners on price.

The old game in that industry, in case you’re not aware, was to offer a free room of cleaning, followed by a low-ball offer to clean the rest of the house.  The companies that made money doing that always had “complications” mid-job that would significantly increase the total price you ended up paying — in other words, unethically padding your bill.

Well, Joe discovered direct marketing at about the time he threw in the towel on competing on price.  And he came up with a plan.  He was going to educate potential customers on how to hire a carpet cleaner to get their carpets cleaned properly at the lowest possible price.

And along the way, he was also going to expose the mistakes people made when hiring a carpet cleaner, common carpet-cleaning rip-offs, costly misconceptions about hiring a carpet cleaner, the importance of value versus price, why you want a clean and healthy carpet, and so on…

So rather than making the standard free room offer, suddenly Joe was offering a consumer guide to carpet cleaning.  You’d call a number for a free recorded message offering what was teased in the report (this was pre-internet).  You were asked to leave your name and address after the recording, to get the report revealing all.  When you did this, Joe would send you the report along with an offer for his carpet cleaning services.

It completely transformed his business.


Because in the consumer awareness guide, he’d reset the buying criteria for hiring a carpet cleaner.  Prior to reading the guide, the consumer couldn’t be blamed for buying on price — without any better knowledge of the industry, it’s all they had to differentiate between one service and the next.  So whoever offered the lowest price in their Yellow Pages ad would get the business.

But once someone read Joe’s report, they realized all the trappings of the industry, and how some within the industry would use low prices to sucker them in, and then either deliver a totally inferior service or massively inflate the final bill over the advertised price.

By the time they were done reading Joe’s report, their buying criteria overwhelmingly favored doing business with Joe over every other option available to them in the marketplace.

If you ever feel like you’re competing on price, this is exactly what you need to do…

First, you need to figure out what is unique about doing business with you.  If there’s nothing unique, make yourself unique.

Quick example: you’ve probably seen branded pens, t-shirts, stress balls, and so on — it’s called the advertising specialties business.  99% of businesses in that industry are identical (tiny businesses on life support).  But there are very few that pick a niche or vertical and serve it EXCLUSIVELY.  Such as, “We provide end-to-end branded merchandise for chain restaurants.”  Or, “We provide franchise companies with branded merchandise and an online store for their franchisees.”  And so on.  Aside from the one or two leading brands in the generic advertising specialties business, the only ones in that industry that do well are the ones that have created a unique business and offering within that commoditized industry.  In other words, in an industry where nothing is unique, they create uniqueness.

Second, lay out all the potential buying criteria that can be used to help your best potential customers realize that you are the superior choice to any other option available to them in the market.

Third, create a way to educate your prospective customers on what you do, to help establish those buying criteria as a better way than price to make their purchasing decision.

Fourth, make a clear compelling offer in line with the buying criteria you’ve laid out.

Crazy side thought…

I know clothing stores are going this way (and I seldom go clothing shopping so forgive me if I’m missing any obvious examples)…

But when my wife and I were recently married and didn’t yet have our 3 kids, she used to take me clothes shopping.  Which meant I’d spend quite a long time sitting outside of womens’ dressing rooms.  Often, on a chair placed almost as an afterthought, for people like me.

Well, it was in one of these trips that I started imagining a different scenario.

First off, what if the area outside of a dressing room were meant to make trying on clothes a more social experience?  That is, what if they served coffee, water, or other drinks that actually made you enjoy sitting there — along with offering comfortable seating?

Then, I took it to another level…

What if instead of the person trying on clothes coming out of the changing room and just standing there in the usually unexciting part of the store just outside of the changing rooms…

There was actually a runway out of the changing room area, that was surrounded by this social “cafe” setting?

Suddenly, you go to these stores and trying on clothes is a fashion show experience…

Where your friends actually want to come and enjoy and socialize.

This is how bridal gowns are sold.  It’s not to big of a stretch to imagine this being a breakthrough strategy in most clothing stores.

Yours for bigger breakthroughs,

Roy Furr

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