Be aware that there are two 'gaps', or surpluses, whenever any product or service is offered for sale. There is the gap between what the customer is willing and able to pay and the 'market price', in other words between their perceived value and the market price. This is the "buyer's profit."
“Developing strategies for charging different prices for different
value takes innovation, creativity and a willingness to experiment”
There is also a gap between the price the producer would be prepared to provide the product/service for and the price it is actually sold for. This is the "producer's profit." Whilst buyer's profit makes customers happy, it is producer's profit that makes firms and individuals rich.
If a supplier can identify and segment customers willing to pay more, presumably for more perceived value, they can capture some more of the buyer's profit too. Developing strategies for charging different prices for different value takes innovation, creativity and a willingness to experiment.
Anything can be differentiated - This is what marketers are paid to do. Therefore there is no such thing as a commodity, only lazy marketers!
You can differentiate yourself at low cost - It's the perceived value that matters. All it takes is imagination!
“Anything can be differentiated. There is no such thing as a
commodity, only lazy marketers!”
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
Perhaps unsurprisingly, people's views on price acceptability can vary with circumstances as well as with the issues they face and the products and services they may be thinking of buying. One set of circumstances that can vary from occasion to occasion for the customer concerns money and the way the customer is spending it.
There are essentially four ways in which money is spent, depending on whose money it is and on whom it is being spent.
* Spending your own money on yourself - You'll want the biggest 'bang for your buck'!
* Spending your money on someone else - You'll still want the biggest bang but if you're
not sure, you just give them the money - As you might with a Birthday or Christmas
present. But then you've put the recipient straight into the previous category!
* Spending someone else's money on yourself - There's little incentive to economise!
You just need to ensure you're not being totally ripped off.
* Spending someone else's money on a third party (for example Government
programmes) - Again there's no motivation to economise as there's no incentive
for spenders to evaluate Return on Investment for those providing the money,
or to ensure that the expectations of the recipients are being met.
“There are four ways in which money is spent, depending on whose
money it is and on whom it is being spent”
Understanding this pretty simple structure enables the supplier to set their pricing accordingly, so it is essential in your questioning to establish whose money is being spent and on whom, amongst the many other pieces of information that allow you to fully understand the customer's problems and the circumstances surrounding them.
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
Many will be familiar with the four Ps of Marketing:- Product, Place, Promotion and Price. But are you really sure in your mind what all four Ps mean? Could you define them all? Could you describe them all to someone else?
One analogy that I think makes things much clearer is to think about an arable farm. The farmer decides which crop to grow in each field, then prepares the ground, sows the seed, nurtures the crop and reaps the harvest.
“Think about an arable farm”
In this case:- The seeds and the planting process are the equivalent of Product
- The type of soil where the seed is planted equates to Place. Another equivalent of Place is target niche or ideal customer type.
- The fertiliser and water applied to the soil to encourage growth of a healthy crop are analogous to Promotion
- The harvest which is gathered in, the value which results from the other three Ps, is the manifestation of Price
And for those using cost-based pricing there is a fifth P: Prayer!
If you agree with these thoughts and would like to find out more about structuring your business in a better way, selling properly, how to make sales without selling and get paid what you're worth,, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk
