Buying is irrational...even B2B buying

Is your customer buying...

impulsive gratification?
the right to procrastinate?
the fact that someone else can't have it, while they can?
looking good to a boss?
a moment of positive attention from a significant other?
stress reduction?
adventure?
self confidence?
a class or economic or social statement?
a way to reverse a risky decision (if it goes bad)?
security in the face of perceived danger or attack?
job security?
human kindness and appreciation?
blame avoidance?
rapport?
bragging rights?
found time?
not having to learn a technology or skill?
not having to understand or think about the problem they're solving?

Even B2B buyers are buying for such reasons. It's never about the lowest price for Widget or Service X. Price follows value. Value often lurks in irrational places.

How to charge the highest possible price

THIS BLOG HAS MOVED: CLICK BELOW TO READ THIS POST ON OUR WEBSITE. THANKS!

Understand what makes your product most valuable to your customers. Exercise caution when selling under any other circumstances.

Price is always a strategic value question. It gets short shrift in the business plan when the business doesn't understand its customers' buying decisions.

Price power is also why so many companies outsource noncore tasks or divest noncore assets. If I can't deliver enough value to have a business model, I have to retool my delivery model, find new ways to make my existing infrastructure deliver value, or go out of business.

Case in point: Blockbuster and late fees. They're addicted to the revenue stream from late fees, because they haven't identified a strength that rationalizes their current cost structure. They also haven't retooled (or at least haven't finished retooling) to lower their costs. In return, they're losing customers, market share, and business viability as a going concern. Raising prices and adding fees won't save them.

More positive scenarios:

...If your art nets you more in a gallery, then stay away from art fairs - or vice versa.

...If your customers cost you double what they're willing to pay for last-minute work, use price to drive away rush orders.

...Or, specialize in crisis management and become your market's first call at the last minute. Just make sure your premium price accounts for the riskier business model and high pressure -- and the value your client gets out of the arrangement.

Tough times or no, you have more pricing power where you have strength. Don't let trends, fads, or desperation fool you: if you overprice something your customer doesn't value, you'll be worse off than before you started.

What should I charge?

THIS BLOG HAS MOVED: CLICK BELOW TO READ THIS POST ON OUR WEBSITE. THANKS!

First, charge more than your costs. A surprising number businesses do not cold-heartedly understand or allocate their costs. The more you do, the more pricing power you have.

Second, charge as much as you can. Right? If you base this on benchmarking your competitors, this anchors you to the market mean. If your product is different or better, or if your cost structure differs from that of your competitors, then competitive benchmarking anchors you to the wrong target.

Third, charge as much as you should. Just because you can get by - or even sustain - at a lower price doesn't mean you should. Remember: the comedian's toughest audience is actually the one that got in without paying admission.

Long-term impact requires short-term impact

THIS BLOG HAS MOVED: CLICK BELOW TO READ THIS POST ON OUR WEBSITE. THANKS!

Fortune 100 marketers admitted to Marketing Sherpa that long-term "brand equity" campaigns are largely bunk. If a campaign does not produce a short-term lift, there will not be a long-term lift, either.

This doesn't mean that brand power doesn't exist. In a world that's looking for more marketing accountability, though, visibility is not an end in itself. If you don't have a strategy for monetizing that visibility... then your marketing spend is about something other than business, which is about ROI.

A thing of beauty...

THIS BLOG HAS MOVED: CLICK BELOW TO READ THIS POST ON OUR WEBSITE. THANKS!

Question: "I see a logo (or matching stationery, rebranding, whatever) as an investment. What should I spend to make a beautiful brand for myself?"

Answer: As a marketer, I can't care about the logo until something is actually happening.

Why? Your first customers won't buy because of the logo. They'll buy because they need something and trust you to deliver it for them. Start with your relationships and your message. Get some traction in sales. Prove your ability to deliver. Now you've got valuable things like references and testimonials and revenue.

Focus on doing what you need to do, not on what it looks like.

Now, if you find yourself spending inordinate time creating forms and stationery and things you need to get things done, then spend the money to get help with them.

If you find that your clients aren't taking you seriously because your presentation is a little too homemade, or if they're having trouble understanding what you do, then get some help and deal with the issue.

If you aren't losing out for the lack of pretty materials, save your precious cash. Create value, not art.