Do You Know What You’re Selling?
Are you sure?
Are you really, really sure?
Here’s a test. Can you tell me what these well-known businesses are selling?
- Mercedes Benz?
- JCPenney, Macy’s and Nordstrom?
- Anheuser-Busch?
- Gillette?
- Johnson & Johnson?
Based on my experience in working with business owners, here are the answers I usually get.
- Mercedes Benz – luxury cars
- JCPenney, Macy’s and Nordstrom – clothing
- Anheuser-Busch – beer
- Gillette – razors and razor blades
- Johnson & Johnson – healthcare products
Were these answers fairly close to yours? If so, then I’m going to suggest that you don’t really know what you’re selling. Here’s why.
While Mercedes does sell luxury cars, what their customers value is the image enhancement that the Mercedes name brings with it. Certainly customers enjoy the luxury, comfort and safety their Mercedes provides, but the real value is that a Mercedes in the drive says “I am extraordinarily successful at what I do. Here’s the proof.”
Even though JCPenney, Macy’s and Nordstrom all sell clothing their pricing varies dramatically. How can that be if they’re all selling clothing? The reality is that they, too, are selling image – albeit varying degrees of image. The JCPenney image offers current fashion trends at affordable prices. Macy’s image is based on some designer names and more customer service than you get at JCPenney. Nordstrom’s takes image to a whole new level with its store’s ambience, attentive sales force and, as with Mercedes, brands that say “I’ve arrived!”
The King of Beers” says it all. Anheuser-Busch is in the business of selling the idea of a premium beer. It doesn’t matter that people’s tastes in beer vary widely, Anheuser-Busch is selling that premium-beer concept and it serves them well. In China, their products are gaining market share despite staggering price premiums over the Chinese beers.
Gillette does sell razors and razor blades, but that’s not the secret to their market domination. They focus their attention on two value proposition for their customers – image (the best a man can get) and innovation. Every few years Gillette comes out with something new to enhance the comfort and effectiveness of their razors. A far cry from razors and razor blades, isn’t it?
Johnson & Johnson is a household name that breeds confidence despite its recent Tylenol recall. J&J has a long history of quality and quick, effective action to remedy problems that arise. The reason many buyers choose J&J products over competitors’ offerings is the confidence they have in J&J – in other words, its image. This image allows buyers to save time while shopping. What J&J is really selling is image and time savings. Their products are simply the media through which their image and time savings are sold.
With these examples in mind, what are you selling? Is it the same thing you thought at the beginning of the article? In reality there are only three things that any business sells – image, innovation and time-savings. Identify which of the three (or which combination of the three) you’re selling and you’ll be able to command and get higher prices for your offerings.
It’s counter-intuitive, but the key to commanding higher prices is understanding that it isn’t the product or service itself that attracts buyers. It’s the intangibles associated with the buying experience.
Discover how easy it is to command higher prices for your products and services, call me at 314-707-3771.
You can get my book, Pricing for Profit, by clicking on the book cover or by ordering online from Borders.com, BarnesandNoble.com and Amazon.com.
Enjoy!
Tags: counter-intuitive pricing, price management, Pricing, pricing for profit, pricing for profitability, pricing management, pricing strategies, pricing strategy
