Month: October 2017

Using Art and Science to Price Your Products and Services

I was at dinner with a friend the other night and we started talking about her new business. She was asking a lot of questions about marketing when the topic of pricing came up.  She has a very premium product and is trying to find the best way to price it out.

I’ve always said that pricing is part are and part science, because you need to do research to see what people are willing to pay for your product/service and then place your stake in the ground and decide on what it is. Over time you’ll be able to adjust the price as you collect more data, but until that point, it’s based on your decision.

Pricing can be scary. If you price it too high, you’ll lose opportunities. If you price it too low, you could strain your operations by increasing work load without enough margin to cover the cost.

One way to price your product is with the tried and true “three option comparison”. You have three versions of your product (low feature set, medium feature set, high feature set) and each version has an increasing price point. If you’ve ever signed up for a web-based subscription you’ll know what I’m talking about. More often than not, people will select the middle option — looking for the best value.

But this may not always work for you. If not, there are other options to consider. Check out this great post by Kissmetrics called “5 Psychological Studies on Pricing you absolutely MUST read.” I love their examples, tips and tricks. It really makes me wonder about my own pricing strategies and if I need to reevaluate them.

Will AI Buy Me A Snack?

I got a chocolate milkshake tonight.
That may not sound interesting.

But I am interested to understand how my buying decision unfolded and if there is a better/easier way to make this happen.

Cause: I got up at 4:20 am and worked out.
Effect: My energy level was low tonight and I was looking for a fix.

Cause: I had a really good day at the office. I had some very effective meetings.
Effect: I wanted to reward myself.

Cause: I was home alone—the wife and kids were all doing something fun.
Effect: I didn’t need to buy a milkshake for my whole family.

Cause: It’s been a long time since I’ve had one.
Effect: I justified that I need one from time-to-time.

It wasn’t a single item that made me get in my car and drive to get a shake. It was a combination that, when bundled together, allowed me to make the purchase.

When we think about the vast amount of data that’s generated by each of us on a second-to-second basis, we must ask ourselves, “Why did I even need to make the decision to buy the milkshake at all?”

In emerging world of artificial intelligence (AI), I figure one day I’ll just get in my self-driving car and it will take me to my favorite milkshake establishment—without giving it any commands. When I get there, my order will be ready and waiting. Or better yet, my car will drive there by itself and pick my milkshake for me, or it will be delivered by drone.

The fact of the matter is that AI will be identifying our needs in advance of us even thinking about them.

Let’s break down my day again and look at the data (current and future):

Data: My watch will be able to identify my biometrics and determine my level of fatigue, my heart rate, my mood, and my blood-sugar level.
Data: My calendar is on-line and can determine if I’ll be home alone.
Data: My credit card statements are online and can tell the last time I has a milkshake.

AI will filter through the millions of data sets we produce each day to predict what we need next. It should understand our requirements, our wants, our needs, our desires. It should know if the batteries are low in my smoke detectors and order them automatically (the same goes for the toner in my printer!). It should know that my daughter loves dogs and hates cats so that when she sits at the computer, the desktop is a cute Labrador puppy.

It should know that I have a struggle with an employee at work and need to have a meaningful one-on-one offering tips on how to listen empathically.

It should know that I have a 15-minute window and would really like to read an article on how to launch a new product.

It should know that I’m trying to lose weight and so a milkshake is not what I should eat tonight and it should steer my car away… far, far away. {Stupid AI! I may hate it if I can’t ever have a milkshake again!}

You get the idea.

Traditions and consumers

My sons and I have a tradition that twice a year (the first Saturday of every April and October) we trek to a popular burger joint 10 miles from our house to have dinner, joke around and talk about life (and I usually hound them about their goals). The fact of the matter is that there are dozens of restaurants between our house and this one particular restaurant. We’ve had this tradition for years and we would never go anywhere else. It just wouldn’t be the same.

Tradition in marketing isn’t something you hear much about, but it’s an interesting thought? How can you get your clients to purchase your product as a tradition? What do you have that they must have at certain intervals in life? How can you get a tradition started?

 

Why are case studies important?

One of my favorite marketing books is Crossing the Chasm, by Geoffrey Moore. If you haven’t read it, buy a copy right now and read it. It will change your view on how to market your products and services to consumers. One of his key points is to generate client stories. Hearing a peer speak highly of your product is one of the best ways to convince a prospect to purchase.

There are many different ways to create case studies. Some people claim that they should be short (500 words) others claim they should be long. It really depends on how you plan on using them. If your goal is to drive greater traffic to your site, you will need something with adequate keywords in it, so longer may be what you need. If your sales force is just looking for something to share with prospects, you could go with a shorter, scannable version of a case study.  I don’t think there is a “one-size-fits-all” formula for them. In my experience of writing dozens and dozens of case studies, there are a few things that should be included:

  1. About the Client
  2. The Challenge
  3. The Solution
  4. The Results
  5. Call-to-Action

Everything else is just filler because most prospects are going to skim it looking for relevant information and results. Here are some case study examples and resources to help you out.

Case Study Template (HubSpot)

How to write a Case Study (Zapier)

Ultimate Marketing Case Study Template (Curata) [NOTE: Be sure to scroll down on this one to see the Bitly example. Or just click here.]

The world’s largest social networks

Do you ever wonder what are the largest social networks in the world?

The answers may surprise you. Although Facebook holds the number one position (they also own WhatsApp and Facebook Messenger), three of the top ten (WeChat, QQ, and Qzone) are all owned by Tencent, in China.

This should remind you that you need to know your target market. Are they actually on Facebook on a regular basis or do they frequent LinkedIn? Knowing them helps you understand where to spend your time (and money). Now that you know this information, what will you do differently?

Statistic: Most famous social network sites worldwide as of August 2017, ranked by number of active users (in millions) | Statista
Find more statistics at Statista