[isp-marketing] Re: Is your Price Too Low?

["Peter R." <peter@...]

Training Lesson:
Is Your Price Too Low?
By John P. Hayes, Ph.D.


Small to mid-sized business people tend to think that a low price is a good price
for their products and services. "I can't charge more," I often hear them say,
"because my competitors will undercut my price and eat my lunch."

To which I say, "Good!"

And they say, "Huh?"

If you also said, "Huh," the rest of this training article may be helpful to you.

Take a moment and answer this question: How much should a man's haircut cost?

Got the answer? . . . How many of you chose
(A) a number under $15?
(B) a number between $15 and $25?
(C) a number higher than $25?

If each of our subscribers answers my question, you can be sure that thousands will
have selected A, thousands will have selected B, and thousands will have selected
C. More will likely have selected A or A and B than C, but nonetheless there will
be thousands in each category.

And what does that tell you?

It tells you that all customers are not created equal!

That is such an important principle for all of us in business to understand. Some
customers are willing to pay more than other customers for the same product or
service. Your job is to find the customers who will pay the price you ask.

So let's say you would cut a man's hair for $9.99. Good for you. You have an
endless number of prospects and customers. And so do those of you who would cut a
man's hair for $19.99, and the same for those who would charge $39.99.

Want proof? I used to get my haircut for about $12 (including trimming my beard).
Always got a pretty good cut, too. But often times I'd have to wait in line for
that $12 cut because, after all, $12 is a fairly inexpensive price to pay for a
haircut in Dallas, Texas, and many (maybe most) men buy haircuts by the price.

Even worse, after getting my haircut I'd have to go home and take a shower because
I couldn't work with teeny clippings of hair itching my back and shoulders. Waiting
and showering afterwards are the two things I dislike most about getting a haircut.

Then one day, for no particular reason other than it was convenient, I walked into
a huge, stylish hair salon and asked for a haircut. It wasn't until I was already
in the chair that I saw the price: $25! Plus a few bucks more for my beard! Twice
what I would normally pay. Ouch!

But with the stylist already at work it was too late to change my mind, so I got my
haircut. When she was finished, the stylist gave me a warm wash cloth. At first I
looked at her as if to say, "Huh?" She motioned that it was for washing my face,
cleaning out my ears, washing my neck. I tried it, and as soon as I did I knew this
was the place for me! Because of that wash cloth, I wouldn't have to take a shower
afterwards! Not only that, the warm cloth was refreshing. So much so that I said to
myself, "This is worth twice the money!"

I've noticed that a huge number of other men think just like me because they're at
this same salon, paying twice the money.

Meanwhile, the $12 salon that's not more than a hundred yards from my salon is as
busy as ever. Both salons have plenty of customers. And they will continue to have
plenty of customers so long as they market their services appropriately.

Many men would say, "You pay how much for a haircut? That's ridiculous." To which I
would say, "Not all customers are created equal. Besides, I don't get haircuts
anymore. But about once a month I do buy a warm wash cloth!"

Let me ask another question: If you cut hair for a living and wanted to earn
$40,000 a year, where would you want to work? . . . Just as I thought. You'd want
to get as much money as possible per hair cut. In the $12 salon you'd have to work
at least twice as hard as stylists who are getting $25 or more per haircut.

And one final question: But what qualifies you to work in the more expensive salon?
Don't fool yourself on this one. It's not the quality of the haircut. I rarely got
a bad $12 haircut. And I never got a warm wash cloth with a $12 haircut.

All customers are not created equal. Find out what they want. Then give it to them.
If you give them what they really want, that is, if you deliver value, they'll pay
your higher price. Some (maybe many, maybe most) won't, of course, and don't you
worry about them! Let them go to your competitor, who's working twice as hard as
you, for the same (or less) money!

As soon as you understand that all customers are not created equal, you might up
your prices and start enjoying your business all the more.

. . . Dr. John P. Hayes is the co-author of Network Marketing For Dummies with Zig
Ziglar. He recently wrote the Franchise Pre-Investment Checklist, an eBook, which
you can immediately download. To invite Dr. Hayes to speak to your company, contact
him at 972.985.8044.