Are you speaking in the same tone of voice?

Are you speaking in the same tone of voice?

red_bull_logo

 

Whilst I personally don’t drink the energy drink Red Bull I love the business of Red Bull.  Apple gets much said and written about it for its huge success (and so much of it is well deserved). However there is so much about Red Bull from a business perspective that is an incredible story.

I know some people have a problem with the energy drink sector. However lets just put that issue aside for the minute.

One of the things that I admire is the consistency of their message. Since founding the business the message has been the same. They have constantly attached themselves to the extreme sports and the sports which have significant risk and excitement attached to them. And then off course there is Felix’s jump from space.

The founder Dietrich Mateschitz in a interview stated that they have always been “speaking in the same tone of voice.”  Everything about the company from the advertising, to the sports, to the ambassadors of the brand, to the shape of the can is consistent. The message is always the same.

The value of this consistency is massive. There is no doubt in the minds of the customers exactly what Red Bull stands for.

Can this be said about your business?

I don’t just mean the marketing message, I mean every aspect of the business. From the marketing message, to what your customers experience when purchasing from you , to the internal operations of the business.

Is it clear what your business stands for?

#21 David Bateson – Creating authority through content

#21 David Bateson – Creating authority through content

 

David Bateson from News Business join me to talk about the topic of building your authority in a chosen market.  Much is said about content marketing but in this conversation David brings it down to some key actionable points on how to really make this a reality.  David is originally from Oxford UK who ended up in Brisbane Australia helping businesses to build their authority. Also David is an Italian Car lover which is an interesting story. 

[Read more...]

Give your prices meaning

Give your prices meaning

All Prices are Contextual 

When people buy, they  judge the choices in terms of relative advantages, not in absolutes. 

Dan Ariely, in his fantastic book he wrote “most people don’t know what they want unless they see it in context”.

If you don’t give them options then they will compare your services or products to something else. It is why people get prices from multiple vendors. They don’t know what they should pay from something. People want to compare to make sure that they’re not spending more than they should.

Now it is important that you adopt a contextual pricing strategy. It is important that you present more than one option with one price to a potential customer. By giving the customers choices they will be be more comfortable.

I will however leave the aspect of options for another post.

In addition to providing options however there is another aspect of contextual pricing strategy. Help people relate to the numbers. Unfortunately (I say unfortunately as someone who loves numbers) most people struggle with numbers. They want value rather than nice numbers. You need to create a frame of reference for your buyers.

Sanebox, a tech company with a solution for email has the following pricing page:-

Screenshot 2014-05-24 22.36.08

They have used contextualisation simply in two ways (1) the use of options and (2) the names of the options.  Snack, Lunch and Dinner provide a familiar frame of reference.

However even without options you can still compare your prices to another frame of reference – eg for the price of a latte a day you can subscribe etc……

Provide you prospective customers with a frame of reference and give the numbers some meaning.

We automatically think that the context has to relate to the value eg the price is say $4000 but it will add 10% to the value of your house. The context does not have to be that way though that may work.  The problem with this is if you use another number to frame the context you still have the issue that people struggle with numbers.

So for the price of a latte you could ……

A lesson from a local Espresso Bar

A lesson from a local Espresso Bar

2014-04-30 08.41.02Not far away from where I live is a great little roaster and expresso bar called Cleanskin HQ.  For anybody in Brisbane I strongly recommend that they drop in for a coffee.

However I was in there yesterday (once again) and I saw they had a business card on the counter. Upon reading I was impressed yet again.  An image of the back of the card is in this post. 

So many coffee shops have various types of loyalty programs. Cleanskin HQ says no. Many coffee shops think they have to do copy others, to copy the strategies of the big guys – Cleanskin HQ says no. 

As they state on the card, if you want delicious coffee, carefully sourced and handled by passionate & obsessed people then their coffee is for you.  It is not only the coffee but importantly it is the people.  When you go there it is not just the coffee, it is also the conversation. 

They are not copying blindly other expresso bars. They are creating their own identity and through it a connection with their customers. They stand for something. 

Now guess what I can’t remember the price I pay for the coffee. They have pricing power. I don’t go there to get cheap coffee. I go there to get great coffee with a great experience. 

 

Value is not a number

Value is not a number

Digital Image by Sean Locke Digital Planet Design www.digitalplanetdesign.com

 

 

 

 

 

 

Much is talked about Value, Price and Worth. We are questions like – what is the value of our services to our prospective clients?, what is the worth of what we sell, what price should we charge for our services or products?

But value is not a number.  

We spend so much time trying to put numbers around value.  Maybe part of the problem is us accountants. We put numbers around the value of a business. But that is a story for another day. 

Value is subjective. What I see as of value may not be the same as you.  The price I might be willing to pay for an item will differ to the price you are willing to pay for the same item.

Value is always contextual. The context will change our perception of value. The best example that I like is that of Nepresso pods.  If we compared the coffee to instant coffee it would seem to be very expensive but Nepresso have changed the context. We are encourage to compare these coffee pods to the coffee shop experience. The value in that context changes.

Value is not a number. Value is not a constant either. It changes based on our perceptions, on what comparisons we make, on where we are in life etc etc. 

So before we can start talking about the price you should charge you need to understand the value of your services or products from your customer’s perspective. 

Remember value is not a number. It is much more complex. 

 

 

To build your authority – double your prices!

To build your authority – double your prices!

CB-AI-JohnJantsch

Recently John Jantsch wrote an excellent piece for the great Copyblogger site (here is the article) on building long lasting authority. It is an excellent article. One of the five points that John discusses is “Charge what you’re worth”.  As anybody who has read any of my blog posts or listened to my podcast would have heard – hourly thinking is just way to prevalent. 

John challenges readers to double their prices. To make it work John says there would be 4 questions that allow you to figure out to make it work. These questions are :-

      • What would you have to do?
      • Who would you have to become?
      • What would you have to create?
      • Who would you need to start hanging out with?

I would totally agree with John in these questions.  However one key point that I want to make is this – Doubling your prices comes before you have long lasting authority. Often time I hear the comment from a business owner that they will increase their prices when they are the recognised authority, the go-to firm in their chosen market. But price is a signal. The signal being sent from low prices is low quality, low authority. 

To deliver on higher prices (or as John has stated double your current price) you have to determine how to deliver value on these higher prices. The higher price also sends an important signal to the market.

So what is holding you back from doubling your price?

The answer is you – nobody else. 

If you want long lasting authority in your chosen market double your prices. 

 

Customer Goodwill creates Economic Goodwill

Customer Goodwill creates Economic Goodwill

changing mood Contest

It is not the fair market value of the inventories, receivables or fixed assets that produce a premium rate of return for a business. Rather it is the combination of intangible assets, particularly a pervasive favourable reputation with consumers (clients) based upon countless pleasant experiences they have had with both the product and the personnel.

It is that reputation that creates a real asset for the business. It is that reputation that allows the value of the product to the purchaser to the major determinant of selling price.

So given this simple fact of business why is it that it gets lost in the midst of running a business?

Everything needs to be focused on designing countless pleasant experiences for your customers with both the product and your people.

Is there a community around your business?

Recently I went to an Evernote Users Meetup and I organised an event with Ben Walker at his Coffee shop inside his accounting firm (Inspire CA).  Now at first these don’t seem to be linked in any way.  

But there is…

Both businesses (one digital and global and the other a local accounting firm in Brisbane, Australia) have communities around what they do.  Ben of Inspire CA put the Coffee shop to make it a meeting place of entrepreneurs. Evernote has meetups all over the world. 

These communities are the key to the businesses having continued success and growing further. Yes if either of them do something that upsets these communities their businesses will be impacted.  Equally though both businesses if they listen to and involve the communities will go from success to success. 

Community is not easy to build. You need to have a story that people can talk about.  At the Evernote Users meetup the attendees were giving real examples of how Evernote has improved their working or personal lives. It was in the name of tips and tricks but really they were reinforcing the story of Evernote and what could be done. Free advertising or marketing for Evernote. At Ben’s coffee shop the business owners are telling the story of the accountant who does things differently.

How are you building community around your products or services. 

Is manufacturing dead in Australia?

Is manufacturing dead in Australia?

There has been much discussed in Australia about the decline of manufacturing.  We have had all the major car manufacturers announce the closure of their Australian operations. This has followed last year announcements around the steel and other manufacturing industries which are moving offshore.

But let me tell you about a company that is going against the grain…

maton

Yes Maton Guitars.

They manufacture Guitars and have done since 1946. It is still a family owned business.  They are proud to be based in Australia. Recently the owner Linda Kitchen was asked about this and she talked about how they have started exporting guitars to China.  Not the other way around and basing the manufacture in China.

Some incredible artists have played Maton Guitars including :  Tommy Emmanuel, Keith Urban, Neil Finn and even the King – Elvis Presley.

I am learning the guitar so have been interested in Guitars and trying to make a decent sound.  This was when I came across the Maton. Such a rich history and very fine attention to detail have created a business today that employs over 60 people making excellent guitars.

In the interview I saw Linda discussed a choice that was before them some time ago. There was increasing competition from guitars manufactured in places with lower costs in Australia. So how should they react. One option was to take their manufacturing offshore, another was to really drive costs down in the Australian operations or was there a third way.

Yes there was a third option – the option that was in my mind the best.

Don;t try to compete on price. Let the price conscious buyer purchase the cheap imports.

They had history and quality to maintain. But they needed to keep that story being told about their fantastic guitars.

So they decided to introduced custom designed guitars which have prices tags between $5,000 and $20,000.  Yes they introduced the premium product targeted at the true guitar player (maybe one day I will get one). This strategy is fantastic because of two reasons (1) there is better margin on the premium products (2) it amplifies the message about the brand.  The professionals purchasing the custom guitar are going to further add to the brand which will reinforce their baseline products.

So manufacturing in Australia is alive.  It is just that they have worked out how to be different and guess what it is successful.

If you wanted to sell staplers – what would you sell?

If you wanted to sell staplers – what would you sell?

I know crazy question.

Stapler

But bear with me.

You could try to create the routine stapler like the one pictured above and go for mass production & mass distribution.  But because the stapler is in essence the same as all the other common staplers out there you will need to go for huge volume to make huge profit.  This will mean a large efficient operations to make money. It will mean a long tough battle to make a great business.

However there is another way…

What about a premium stapler?  No I have not gone completely crazy as I hear you say that there is no such thing as a premium stapler.  I am not here to provide the greatest thought through business model for the premium stapler business however here are some quick thought. Maybe you get get staplers signed or some other way identified with famous movie stars and sports people.  I am sure there could be the market for a Roger Federer stapler.  And may the price would be $250 per stapler.  You might not buy the Roger Federer stapler but I strongly suspect there would be a market for these.

My point in this post is not to solve the stapler business but rather to highlight the point it is much easier business if we head toward the premium product point.  Yes you can build the large super efficient business that is profitable however I believe that for small and medium businesses the option of selecting the premium option is the more enjoyable business.

Love to hear your thoughts.