I’ve just done this without writing an entry for two weeks (it wasn’t intentional). An interesting thing happened. Loyalty remained and traffic increased.
When someone values something having less of it can increase anticipation and desire.
It won’t last forever. In the long run people will get annoyed and disappear…..
But sometimes limiting exposure can ensure our worth is enhanced and not diminished. We’ll remain exclusive.
Start ups with premium goods take note.
There is a real dichotomy emerging in most consumer markets. Ultra cheap and ultra expensive. Although it’s fair to assume that something that is 3 times the usual price should have three times the utility, chances are things aren’t so symmetrical.
In real estate a house that is twice the price is often 4 times the size and far more than twice as good. However in consumer goods, something that is 3 times more expensive, might only be 50% better.
Maybe the fact that it is the ‘most expensive’, justifies the price. The price becomes the defining feature.
A great example of this is the Bugaboo Pram. I am sure they are better than the average pram, but how much more effective are they in real terms? Are we really going ‘off road’ with our bundle of joy? Or do we want to advertise to the world that we have spent as much as possible on a pram for our child?
Today I remembered why brands like Kraft, Nestle, Heinz, Kleenex et al have done so well. It’s because they were trusted. Trusted to deliver a remarkable product experience. The problem is, that what was, remarkable in 1963 is no longer remarkable in 2007.
Their trust was built on being safe, reliable, to have function and form. We wanted to feel confident that our cheese slice was safe to eat, hermitically sealed, made with quality milk, that the factory was clean. But now, that’s just table stakes. Cost of entry. The government has created laws which raise the stakes for remarkable products. This is a good thing. Raised standards on all things makes life better, but it does make entrepreneurship harder.
The problem is that trust has been abused by yesterdays’ heroes. Their products are still safe, but they took out all the good bits to make it profitable. Kraft Singles have reduced the cheese in them to the point that they are officially known as ‘Cheese Spread’ – check the label.
Trust is great, but if we abuse it, we leave the door open for those who are authentic.
If we’re first to market how do we know a price the market will accept? There’s no precedent.
In the early stages we get knock backs. People are change averse. They’ll often say it’s too expensive. It’s their default response to your sell in, even if it isn’t true. In these times we suffer Pricing Dubiety. The trick is to stay the course, knock on all the doors first. Sometimes we simply need a foundation customer to lead the others to a new paradigm.
If the price does turn out to be too high, it’s the easiest thing in the mix to change. Besides, it gives us a reason to go back and see ‘the rejecters’ again if we do reduce it.
It’s vital to get our projects to market quickly. When projects drag on, we can lose interest in it. We’re tired, bruised and scared from the battle – the battle of bootstrapping. We often lose interest when it counts most, close to launch. We get sloppy.
Our audience doesn’t care. Why should they? All they see is our offer and our enthusiasm when we engage them. If we’ve lost interest in our project then, why should they be interested?
Consumer promotions simply don’t work anymore, they’re old world. Bribing your audience with the allure of a car or holiday won’t build your brand, rather damage it.
They remind me of the kid with no friends who bought companionship because they had a motorbike or pony. There is a sense of desperation. Occasionally someone will end up liking what’s really on offer (the person / the product), but more often, once the offer disappears so does the loyalty.
If you’re thinking of running a consumer promotion on your start up, maybe you should think about improving your business model. Reinvest the money and time into your proposition. Something is wrong.
In the movie The pursuit of happiness, there’s a seen where the main character asks a successful Ferarri driving stock broker his secret. He replies with two things, “People and numbers”
What it doesn’t mention is the subtlety of this statement. It’s actually about numbers ‘of’ people. It’s the art of rainmaking.
The most important role in any start up is your ability to make rain. (read here sell). It can only be done by hitting the pavement and phone. Our technical and strategic brilliance will need to the back seat for a while. Especially in launch phase.
Success ratios aren’t nearly as important as the number of calls we make. The former improves when we focus on the latter.