All else being equal, a buyer will choose the option with the lowest price - but all else is never equal. Photo / 123RF
COMMENT:
I read a delightful message from Jonathan Stark a few days ago.
Jonathan is an expert on value pricing and works with software developers to help them improve their marketing results.
His message was called "The Helicopter Option" and I thought it was particularly helpful on the topic of pricing and giving clients different options.
Here is Jonathan's message...
Regrettably, it's not uncommon for me to be faced with a particular problem:
"How should I get home from Boston?"
When I travel, I almost always fly out of my local airport in Providence but - air travel being what it is - every once in a while I end up returning to the Boston airport which is about 50 miles north of where I live.
When this happens, I need to figure out how to get home. The range of possible options that come to mind are the following:
• Walk (Free)
• Taxi ($250)
• Limo ($250)
• Bus ($25)
• Commuter Rail ($11.50)
• Express Train ($65)
• Helicopter ($2500)
So why don't I just walk home? It's the cheapest option, right?
Because it would suck, that's why.
Each of these options provide a completely different experience, with different pros and cons, and prices that range from $0 to $2500.
For example:
• Some are luxurious, some are utilitarian.
• Some are shared with other passengers, some are not.
• Some seem safe, others not so much.
• Some are available around the clock, some are not.
• Some are available on demand, some are not.
• Some need to be scheduled far in advance, some do not.
• Some take hours, some take minutes.
• Some have a predictable duration, some do not.
• Some are offer door-to-door service, some do not.
My final choice in any given situation will depend on:
• The weather (raining, snowing, sunny)
• The time of day
• How much of a rush I'm in
• If I need to make a stop on the way
• My general mood
• etc…
What I'm getting at here is this:
Price is just one of many factors a buyer considers when making a buying decision.
All else being equal, a buyer will choose the option with the lowest price - but all else is never equal.
Software development is a high-touch, service oriented profession.
We're not exactly selling sneakers to the mass market.
There are dozens of factors that can come into play in a given professional relationship: experience, speed, quality, attitude, personality, communication style, world-view, and believe it or not, sometimes even race, religion, and politics.
Expose your clients to what makes you unique.
This could be expertise in a particular skill, or it could be a background with a particular audience, or it could be your mission in life.
Whatever it is, let them know about it and you'll start to attract ideal buyers who aren't making a buying decision solely on price.
"Being the best is great, you're the number one. Being unique is greater, you're the only one." - Anonymous
Think about the service that you sell and everything that your clients get when they purchase this service. What makes your offer unique?
PS: Jonathan also has a great mini course on value pricing which I highly recommend. It's offered at no charge and is very good. You can get it at www.jonathanstark.com.
- Graham McGregor is a Marketing Advisor and helps businesses who offer an expensive service to quickly attract ideal new clients. You can download his brand new 106 page marketing guide 'The Expensive Service Marketing Solution' at no charge from www.TheExpensiveServiceMarketingSolution.com.
The cost soared from $580m to $924m but output capacity is up on original expectations.