Wednesday, 15 July 2009

Expensive is the New Free

We are in world where things have gone from 'cheap' to 'free'... to a logical step of us being paid (while a company pays for the adverts) to get you to try their stuff. All a bit upside down to me.

See Chris Anderson's book 'Free'

'Try Before You Buy' is one thing. But giving stuff away is not the raison d'etre of your business.

What’s the new 'free'?
This is possibly the wrong question. I do think we should be thinking about the opposite of free.
The complete opposite… is expensive...

Some clients are willing to pay ridiculously high prices for 'incredible quality' (please note the inverted commas!)…

Food For Thought
In a Gordon Ramsay restaurant you pay 'top dollar' because of WHO has (theoretically) cooked the steak - the same steak from the same butcher is charged out at a premium price because it has been through the Gordon Ramsay kitchen.

So, how much better would the steak be if 'he' cooked it rather than someone at the restaurant next door? Not a lot!!!

You are paying for WHO cooked it (and the whole wrapper, experience etc) and not for the thing on your plate. Could you do the same - make people pay a premium price for YOU (rather than the product/service)?

Do you offer a gold/premium product/price for exclusive service as opposed to a silver or bronze or paper quality?

A client who is a printer now offers three price points:
- standard (five days)
- fast (three days) and
- emergency 999 service (12 hours).

While the same personnel, machinery etc are used at all price points, the price ratio between standard and emergency is roughly fivefold. In this instance you pay for SPEED and GUARANTEED DELIVERY. We recently needed 150 workbooks (the stock had been flood damaged) printed and ready for use in Newcastle by 09:00 the next morning. We were happy to pay 'over the odds'.

Rather then figuring out how to do stuff cheaper, what happens when you move in the opposite direction? Can you offer the 'platinum' service or do you just assume that everyone is buying on price (because let me assure you, they are not).

When you buy a car, concert tickets, a safari holiday, a romantic meal, most forms of advice... then many people want to pay for the 'best' or the 'best experience' or 'best package' and not the best value.

Often we delude ourselves that it is all about the price. Wrong.

Why $0.00 Is The Future of Business - Chris Anderson
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