In his blog, Seth Godin makes this wonderful point about price and value:
Your sales force and your customers may scream that you need to lower your price.
It’s not true.
You need to increase your value. If people don’t want to pay, it’s because you’re not delivering enough value for the money you’re charging [emphasis added]. . .
Isn’t that a wonderful corollary to Pindar’s Law of Value?
There’s a hilarious commercial that underlines this price concept that stars John Michael Higgins in DirecTV’s advertising campaign:
Chairman: Direct TV is doing very well in customer satisfaction. What do we do?
John Michael Higgins: I learned this in business school … when I read about business school … in a book. We can’t improve the service. But we can improve the price. We can make it higher.
Other Guy: We can get the people with disposable income and they can dispose of it to us!
My friend and mentor, Art Jonak, taught me a valuable lesson as I listened to one of his Sunday evening network marketing leadership calls. The question he posed to the group:
“Do you think people buy solely on PRICE?”
The answer: NO!
Art shared that most people buy based on …
A priceless lesson!
And all three of those — along with many other criteria — are ways of defining value.
This might be controversial, but I’ve learned more about psychology and human communication from Bob’s book Winning Without Intimidation than I ever did in college in my 3 credit hour ($450) psychology class.
It’s amazing how we’re so hypnotized to presuppose that exorbitant fees equals quality. Again, this is probably controversial, but in my opinion, many people (including myself) are more inclined to pay outrageous tuition than to go to the library and get free and if not better information. It’s kind of ironic that college makes you go to the library anyway.
Sometimes, if not most of the time, the answer is totally obvious but it’s so close to our face that we can’t see it.