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Cheap Vs. Premium Pricing During Troubled Times by Brian McLeod
©2008 Brian McLeod
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LoudMac Creative, Inc.
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All Rights Reserved PAGE 2
I spent an hour this morning eavesdropping on anexcellent conference call from copywriter andmarketing expert,Ray Edwards.
I'm definitely a fan of Ray's. He's a fantastic copywriter. He's also got an excellentbroadcast style delivery of spoken material that’s genuinely enjoyable to listen to, muchbetter than most. I always learn something when I pay attention to what Ray is teaching(or doing).
You might say Ray is extremely VALUABLE...
Now, the purpose of Ray's call today was to address the current economic crisis that'sgripping the US and spilling over into the global markets. Not good. At all...Believe me, I share your pain and frustration. I've lost a small fortune too.There have been quitefew thoughtfulcalls for calm amidst the carnageon"the matrix", not the least of whichwas Kern's "emergency video"...
Among these, Ray wrote a post on theWarrior Forum entitled"Screw TheEconomy...".As might be scientifically predicted,the topic spun around quite a bit...Some people were indignant about perceived insensitivity to the gravity of the plight.Others were worried about selling when no one has any money.
It's entirely understandable. But it's also toxic to your marketing!
Many marketers are freaked out about their OWN finances, so that colors their viewssignificantly.
Cheap Vs. Premium Pricing During Troubled Times by Brian McLeod
©2008 Brian McLeod
-
LoudMac Creative, Inc.
-
All Rights Reserved PAGE 3
In troubled times like these, the one reaction to rising costs and other unfavorablemarket conditions that you must avoid like the plague is to respond by lowering prices
.Marketers reach for this solution hoping to be seen as more attractive to the cost-conscious
consumer. Beware.This type of thinking can be a very costly trap. When you drop your price under risingcost conditions, in addition to devaluing your brand and positioning in the market, whatyou are effectively doing is snipping off another piece of your own profit!Now that your margins are lower, you haveless money to spend acquiring high quality,high margin customers; less moneyavailable to develop and support your newand existing products and services; lessmoney to GROW YOUR BUSINESS.Nope, cutting prices can be very dangerousbusiness...
I asked Ray via email for his take on commodity versus premium pricing in the midst of economic gloom and doom.
Unfortunately, the call was coming to a close and I worded the question clumsily. Raydidn't pick up on the point I hoped he would (rather, I'm sure Ray picked up on it, but hewas running out of time on the call...).
What I wanted to discuss and hoped he'd share his thoughts about was BUILDINGVALUE.
Ray and I seem to very much share the same philosophy with regard to premium vs.commodity pricing, especially in terms of marketing to the affluent.In short,
if you want to make lots of money, you go to where the money is
-- you mightsay you are going to where the money "never wasn't".
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