How much to charge for anything is one of the greatest challenges many businesses, bloggers and consultants face.
Many think there is a “correct” price and do not realize that few things in life are more relative than money.
What really matters is VALUE – not price.
This is true whether you are buying or selling. If you are wondering how to price your products or services, read on – these examples are HIGHLY RELEVANT to what you need to know.
Why Value is More Important Than Price:
The true cost is cost over time – not immediate outlay. To make this clear, here are some specific examples:
SHOES: You can pay a little or a lot for shoes, but the TRUE COST is how long they last divided by what you paid. If you own hundreds of pairs this may not be obvious, so let’s use my boots for our example:
- If I buy cheap boots they cost about $30 and last three months. The cheap boots cost $120 per year to wear.
- If I buy high quality Tony Lama boots they last at least a year, then I can have them resoled and reheeled and wear them another year. These boots cost about $150 so they cost $150 the first year, but only $40 (the cost of refurbishing them) the second year, for a total cost of $190 or $90 per year. So $150 boots cost less than $30 boots over time – and they’re much better for your feet, too!
Our throw-away economy is not only creating overflowing landfills – it is costing us money, too.
- You can buy a window air conditioner for $100 and up, but they only last one season. Or you can save up and buy quality, have it serviced once a year, and use it for years.
- Did you know you can still sometimes find working chest freezers and stoves built in the 1950s? How long did the last refrigerator, stove, washing machine or dryer you bought last? If you want to save money on energy costs and appliances, find a good repair shop that sells refurbished appliances – and have them pick you out a high quality machine. You’ll only pay a small amount more for the best appliance when buying used, but it will last a lot longer. Oh – and be aware that “energy star ratings” are often NOT accurate.
You can buy disposable lawn mowers at Wal-Mart, Lowes or Home Depot or you can buy a high quality Snapper lawn mower and with a little maintenance it will run year after year. If you are in the market for a lawn mower I encourage you to read more about how very different Snapper is from cheap brands in The Man Who Said No to Wal-Mart.
I suspect one of the reasons many people don’t enjoy cooking is that they’ve never had decent pots, pans and especially utensils. Many stores sell cheap junk utensils that are little more than toys. They are often too small to be effective, rust almost immediately, or made from cheap components. Invest in quality and good utensils can last almost a lifetime. See Greening Your Kitchen Cooking Utensils for photos of quality utensils and what materials to choose. You can even buy ergonomic kitchen utensils for those with limited dexterity or arthritis.
These are just a few examples of why value is more important than price. When you are marketing what you do, make or sell, emphasize VALUE and QUALITY. As the old saying goes, buyers are not going to remember what they paid when they’re still getting use from what you sold them months, years and possibly even decades later.
I encourage you to read Values, Value and Valuation – the Money is All Relative. The pendulum has swung as far toward cheap as it can get. It MUST swing back because focusing on cheap is simply not sustainable. The first thing many ecommerce store owners think to do when sales drop is lower prices.
BAD IDEA! If traffic and sales are down and
QUANTITY OF SALES are down,
lowering prices = less profit per sale
right when you have fewer sales!!!
Whether you are selling products or services, NEVER, EVER, COMPETE ON PRICE! Emphasize value. Illustrate as visually and entertainingly as possible what you have to offer. Focus on clients and customers willing to pay a reasonable price for quality and willingly sacrifice any who only focus on price – and here is why:
Customers who focus on cheap will be unhappy
even if you PAY THEM to take it.
They will suck up more of your time and cause you more grief and stress than they’re worth. Let them be someone else’s headache!