Self Employed Success

Market research means:

1. Finding out if there is an audience for your existing product or service

2. Finding out what your audience wants and needs before creating a product or service

3. Finding out what your audience values about what you offer

Last year I had a guest on my Self Employed Success audio series, Doreen Amatelli, who spoke for an hour on how you can do your own market research. Doreen is a professional market researcher, so she knows her stuff!

You can listen to (or download) the audio here:

http://www.passionforbusiness.com/teleclass/doreen-amatelli.htm

Some things never change.

People respond to marketing and advertising today much like they did in 1885, when Thomas Smith wrote Successful Advertising. He reminds us that repeated exposure to our message is the best way to get people to take action.

If you send out one marketing message then get disappointed by the response rate, remember Thomas Smith’s words:

1. The first time people look at any given ad, they don’t even see it.
2. The second time, they don’t notice it.
3. The third time, they are aware that it is there.
4. The fourth time, they have a fleeting sense that they’ve seen it somewhere before.
5. The fifth time, they actually read the ad.
6. The sixth time they thumb their nose at it.
7. The seventh time, they start to get a little irritated with it.
8. The eighth time, they start to think, “Here’s that confounded ad again.”
9. The ninth time, they start to wonder if they’re missing out on something.
10. The tenth time, they ask their friends and neighbors if they’ve tried it.
11. The eleventh time, they wonder how the company is paying for all these ads.
12. The twelfth time, they start to think that it must be a good product.
13. The thirteenth time, they start to feel the product has value.
14. The fourteenth time, they start to remember wanting a product exactly like this for a long time.
15. The fifteenth time, they start to yearn for it because they can’t afford to buy it.
16. The sixteenth time, they accept the fact that they will buy it sometime in the future.
17. The seventeenth time, they make a note to buy the product.
18. The eighteenth time, they curse their poverty for not allowing them to buy this terrific product.
19. The nineteenth time, they count their money very carefully.
20. The twentieth time prospects see the ad, they buy what is offering. 

Why and how a Brilliant White Paper™ can help you leverage your marketing message, draw more clients into your business, and stand you out in 2011!

With Karyn Greenstreet and guest expert Stefanie Frank of White Papers for Entrepreneurs

January 10, 2011
1:00 – 2:00 PM (Eastern Time)

Teleseminar Description:

Authentic entrepreneurs realize that you simply cannot market any other way but through your authentic self.  It means that you simply cannot write about pain points, problems, pepper your prose with buzzwords, and call it good. There is a better, more effective, profound, engaging, money generating way to write.

In this free teleclass, you will learn:

• A framework to create your own Brilliant White Paper™ — this is the core of Initiative Based Writing™ and is quite simply the best free report your ideal readers have ever read – and the most leverage-able marketing tool out there
• 3 Pillars of Initiative Based Writing – you won’t want to write any piece of marketing copy without these!

Class will be recorded, so if you can’t attend live, sign up anyway!

To register:

http://www.passionforbusiness.com/freeteleclass/

See you there!

In 2008, Pizza Hut saw its sales drop because of the economy. Competitors were lowering their prices and offering discounts, and Pizza Hut figured they had better offer a discount if they wanted to compete with Dominoes Pizza and Papa John’s Pizza for a dwindling market.

So in 2009, Pizza Hut began to offer a large cheese pizza with three toppings for $10 (the normal price was $15). Then they sweetened the deal by offering unlimited toppings for the same $10 price.

And sales rose.

That’s a good thing, right?

Fast forward to 2011. The economy is easing and Pizza Hut (and the other pizza competitors) now wants to reinstate their normal pizza price of $15.

And customers resist.

Why? Because of two psychological triggers:

1. People had gotten used to paying only $10 for a pizza with unlimited toppings. When you increase the price back to the normal $15, people see that as a raise in price of 50 percent, conveniently forgetting the pre-2009 pricing.
2. When you lower your prices, you devalue your product or service. You’re basically telling people, “It’s not worth $15, it’s only worth $10.”

As a business owner, what do you do when sales are sluggish and you want to offer a discount, but you don’t want to imply that your products and services are worth less by lowering the price?

Enter the Concept of Adaptive Pricing

Here’s the psychology behind the concept: Customers have different needs and place different values on the various aspects of your product and service (pricing being just one aspect of your offer). For example, many customers value access to a live instructor above learning on their own, so if they have questions or are working on their homework assignments, they can get help from the instructor. Therefore, they’re willing to pay more for a live class than for an ebook or an audio program. Some customers place value on group discussion and 24/7 access, and are willing to pay to be a member of a private membership website. Other customers value private one-on-one services and are willing to pay to get your total attention to fix their problem or create the life they want.

By knowing what your customers value, and creating pricing and discounts based on those values, you can increase customer satisfaction and sales at the same time. Be careful of your OWN psychology: you might be a budget shopper yourself, but not all your customers are. If you constantly offer things for a discount (or for free!), it’s more about your own feelings about money and pricing than the needs of your customers. For every customer who wants things as cheaply as possible, there are customers who demand extraordinary quality and are willing to pay for it. Just look at the different price/value levels of department stores (from Wal-Mart to Neiman Marcus) and you’ll see that there are huge ranges of quality, service, experience and price needs among customers.

So, You Want to Offer a Discount

Great! Offering a discount has a lot of benefits for your business. Pay attention to WHY you are offering a discount (to increase sales, to increase demand, to test a pricing strategy, or to get the word out about a new product/service) and price accordingly. But don’t devalue your product or service and don’t train your customers on a discounted price that’s not going to be around for long.

Three Adaptive Pricing Techniques to Use in Your Business

• Versioning. For customers who are concerned about price above all else, offering them your product or service in a different version at a lower price-point will serve them while still keeping your sales up. Here’s an example: I teach a 5-week teleseminar series called SEO For Everyone, where students submit their homework assignments to me for review and analysis, and have access to me during class to ask questions. That class is priced at $219. But the budget-conscious student, I offer similar material in a self-study audio with the PDF transcript for $99, but they don’t have access to me at all if they purchase the lower priced product. For customers who want private access to me to learn how to do SEO, create an SEO strategy, and want me to analyze their website for them, the price is higher. Each customer has a different need and by creating three versions the service I meet the needs of each type of customer.
• Additions for Free. Another adaptive pricing technique is to offer an extra for free, but keep the base price of your product and service the same. For example, you could offer your individual service to your customer at full price, but then offer them a free additional hour of your time. Walt Disney World theme park had a great success with offering their Buy Four Entry Tickets and Get Three Free package. But don’t offer bogus free bonuses unrelated to the product or service that customers are buying. Customers are now savvy to the free bonuses that many internet marketers offer (Buy Our Ebook and Get $40,000 Worth of Bonuses Free) and it just makes people think you’re trying to fool them, lowering trust and harming the relationship.
• Unbundle. Everyone is telling you to add a whole bunch of your offerings together and give the customer a special price. But what if your customer doesn’t want everything in the bundle? Consider offering your main product or service at full price, and then offering upgrades at a reduced price. You could offer your live event for $1200 then offer an hour of private consulting time for an additional (discounted) fee to those who are attending the live event. Or you could offer them an ongoing mastermind group for an additional fee. Or you could offer them recordings of the live event for an additional fee. That way, customers can choose which upgrades are valuable to them and you can clearly see which upgrades are the winners in the eyes of your customer.

The key here is to know your customer, know what he or she values when it comes to purchasing services and products. If you’re not sure, test out several pricing strategies and see which one pulls in the most revenue.

And it’s also important to pay attention to the economy and stop offering discounts when they are no longer needed to boost sales during tough times. Be strategic and think through your pricing ideas before implementing them so they don’t come back to bite you later!