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Put a Value On Your Value!
To some the title of
this article may sound a bit confusing. But how about if I were
to restate it and say, "Dollarize your Value." Would that help
you to understand it a bit more? If not, don’t worry, I’ll
explain, but in the mean time let these slightly confusing words
serve as a reminder of what you are about to learn.
We all seem to think
that we know the value of our products or service that we sell.
Maybe we do, but I have to tell you that my experience in
watching other business people does not bear that supposition
out. My observation is that we seldom know exactly what the true
value of what we are selling or representing really is. Do you,
for example, do this: calculate the cost of your raw product; add
in time and packaging; pile on a percentage for overhead; top it
off with a small profit margin - then......adjust the whole
thing for market pricing! Well, if you do, you’re normal. You
may not be right and you are probably not getting a true value
for your products and services, but you are normal.
Here’s kind of an
interesting story that you may have heard before, but it serves
as a good example. Famed artist Pablo Picasso was sitting at a
side walk café in Paris drinking coffee when a women of some
social standing approached him and started gushing about how
much she loved his work. Mr. Picasso was uncharacteristically
polite that day and simply thanked the woman for the
compliments. Encouraged by his docile manner, she summoned up
the courage to ask him to do a sketch for her, right there on
the spot. Pablo grabbed his pad, and quickly produced a
rendering of the waiter and his tray of food. When he was done,
he handed it to the women and informed her that it cost ten
thousand dollars. She was horrified. She said, it only took him
ten minutes to do. Picasso replied, ‘No Madam, it took me fifty
years."
The point of course
is two fold. First it didn’t matter that it took him ten
minutes, it was the fifty years that he spent learning to do a
drawing in ten minutes that mattered. Second, any drawing that
was personally signed by Picasso was going to be worth a small
fortune. He knew it and so did the woman.
Let’s extend that
simple principle toward your marketing, and make a slight detour
in what you have been doing. How? By facing the simple fact that
people will far more often act to avoid loss than to save
something. Put a little more simply, if you are trying to sell
an air conditioner that is on sale for $50. off the regular
price, people will be somewhat interested. But if you tell them
they are currently losing $400 a year in wasted electricity with
their old unit, or even a new unit that is not as energy
efficient as your air conditioner, you will make far more
points. Putting a dollar value on loss can often take you to
places that trying to sell savings will not.
One of the most
effective and persuasive campaigns that has ever been run was
about 30 years ago for Fram Filters. It had a mechanic standing
over a customer's car. He spoke to the camera and said, "This
customer didn’t change his oil filter when he should have. As a
result his engine ceased up from the friction. It’s going to
cost him $2,000 for me to rebuild this engine. For just $3.00 he
could have replaced his filter with a new Fram oil filter."
Then came the killer
line: "It’s your choice. You can pay me now, or pay me later."
The inference was
clear. Three dollars now, could well save you two thousand
dollars later. That commercial propelled Fram into a leader in
filters for over 20 years. Notice they were putting a dollar
value on the loss, not how much they were discounting the price
of their filters in order to compete in the market. They
literally elevated themselves above the rest of the market place
and made sure you understood that using a Fram filter would
prevent major problems later. You can also find numerous more
examples in
Assignment For Success.
Your business in no
different. The products and services may be different, but the
principle is the same. Dollarize the value of loss when the
customer doesn’t use your product, and you’ll find that true to
form, people will take action to prevent loss, before they will
spend more money to try and save price.
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