Most would have you believe that all there is to sales is price. That lower the price equals more sales. That price is what separates products from one another. To an extent this is true. For bottom barrel businesses (and I don’t mean this in a pejorative way) price is what matters. Wal-Mart and McDonald’s business model is based on price. However many companies act as if their business is based on price when it clearly isn’t and they end up ruined because of it.
Most of us are not rich. Most of us have been raised with families that have scarcity mindsets. Don’t leave the lights on, save every penny, always looking for the cheapest way for everything. Doesn’t matter how much time it takes, as long as a penny is saved. These type of people will never get rich and they have little understanding of the value of their time. When we grow up in an environment like this we are conditioned to think that price is the end all be all of everything having to do with money. We are trained to think that every is scare instead of abundant. However when it comes down to it price is not the greatest factor in sales, far from it.
Value
Why do people pay large sums of money for a purse that has a certain symbol on it or a piece of art with a certain name scratched across the bottom? Because of value. They believe that they are getting great value for the price. If I have two books and one is worth five dollars and one is worth twenty is the five dollar book automatically a better deal? Well you have no way of knowing at first…yet you know the price. So what matters then? The value of the book is what matters.
If one book is a transcript of interviews with the one hundred richest men in the world and another is how to plant flowers to survive the winter which one is going to have more value to the largest amount of people? It is not price that is the deciding factor in sales, it is value.
However value is not definite. What is valuable to one person may not be valuable to another. For example for one person a personal journal of Gloria Steinem’s might be worth thousands or even more while I’d personally use it for fire kindling…and feel bad for the fire. There’s a saying that has held true and always will “One man’s trash is another man’s treasure” so while we may roll our eyes at women purchasing thousand dollar purses they do the same to us when we purchase thousand dollar fishing rods. There are millions of other examples as well. Different things matter to different people.
Price to Value Ratio
So when selling a product what most people are looking at is the price to value ratio. Don’t get me wrong there are many people who look at price alone but we are not dealing with them here. A car practically is needed to take you from point A to point B. However those who sell cars know that cars represent so much more. That is why slapping a BMW sticker on a car is going to raise its value by a lot. Because BMW is a reputable car brand associated with luxury and class. So when someone purchases a BMW they are thinking of the association that they are buying not simply just the car parts.
Imagine if BMW instead of selling people on the value of class and luxury instead tried to simply sell their cars as cheaply as possible what reputation would that create for them? Not a very good one. Price is associated with quality and for good reason. You generally get what you pay for.
I see so many people who sell books (especially e-books) who are a competition as to who can price their books for the lowest amount. This is ridiculous. While I am all in favor of doing a promotion I know that my products are not bargain bin material, they are potential life changing material. So why the hell would I place them with bargain bin stuff? If BMW prices their cars at used car dealer prices they wouldn’t be associated with class, quality, and luxury they would be associated with cheapness. And while that works for some (again McDonald’s and Wal-Mart) it doesn’t for for all, or even most.
So Remember
It is value that matters most, not price. People get obsessed over price and then forget what it is that truly matters the value. Price is a negligible factor when compared to value. Price your product like crap and it will be associated with crap. This doesn’t mean you can’t run deals from time to time, simple that unless you have a business model along the lines of McDonald’s or Wal-Mart fighting to be the cheapest will only hurt not help your brand. Charles Sledge is not a cheap brand and never will be, the reason being it is a quality brand and always will be. Decide what your brand is before you worry about price and remember “it’s not about price”.
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If you have any questions you would like to see answered in a future post send them to me at charlessledge001 (at) gmail (dot) com. If you found value in this post then I would encourage you to share this site with someone who may need it as well as check out my books here. I appreciate it. You can follow me on Twitter here.
-Charles Sledge
