Price Is A Talking Point

Price is a talking point, but it is not the main issue. It is easy to believe that price is the main issue, but it is not. What also confuses this issue is what also confuses the prospect and that is all the price advertising that is truly meaningless to most prospects. At best, an advertised price is one way that a prospect could compare you with a competitor. Nobody wants to pay too much and everybody wants a good price, but really what they want is to feel good--good about their experience, good about the transaction, good about the potential service.

Being the lowest price might get you a little business, but it is not really the draw that you might think it is. I'll give you some examples I've seen of late:
  • Gas prices have dropped and that is awesome. I drive by one station and it is $2.29 for unleaded and just a half mile away is another station selling it for $3.09. I can drive to every station in town and see a different price for the same stuff all over and sometimes as in this case it is a dramatic difference. Yet, all of them are pumping gas. You would think that the $2.29 station would be buried in business, but it is not true. There must be other reasons, like brand, location, convenience, etc.
  • I have a little book business on eBay and have over 13,000 items online. I will sell a heavy book from National Geographic for $8.95 and others will trip over themselves to sell it for $0.75 to $1.00. Perhaps they think they will make it up in volume, but after shipping it would be a loss to say the least. I probably don't sell as many, but they would have to sell more than 10 to my 1 to even come close. I sell them and my customers are very pleased with the service and the product. Just the other day I had a rare audiobook listed for $30 and someone offered me $10. I declined the offer, rechecked the market and raised the price to $40 and sold it the next day for that amount. It isn't the price.

I'm looking at the newspaper and I see 6 large ads for different dealers all with blow out prices. It is interesting to me that not one of these ads has one payment. How many come in and pay cash? Not very many. How many finance? A very high percentage. Why are there no payments? It isn't the price that is going to sell. They are all trying to sell books for $1.00 and competing over the lowest gross profit--for what? To create some traffic? To get people to drive in? If they sold all the give away units in the ad, where would they be?

Truth is, they don't know how to do it (market, advertise, promote) any other way. I was in the car business from 1972 to 1997 and it didn't really work in that period. Why spend all that money on this form of advertising? Somewhere along the line they thought it was working. But, was it really working? Raise your prices. It won't change. It's not the price, that is just a talking point.

Try something new and make some profit!

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