This is what the most successful marketers use, the reason a large amount of businesses fail is because they fail to implement this “secret.” So if you want to be successful, then value divergence pricing is something you need to get familiar with. I use this strategy often in all my marketing efforts. And when you finish reading this you'll have unearthed a hidden “gem” that will allow you to scale your business quickly with minimal effort on your part.
The Product
Let's imagine you have a product or service you want to sell … Now most people will look at the market, compare what price they sell at and set their value at something similar. However, This is wrong because the most important part of marketing is to standout … Not be like everyone else. Not only will you lose out to your more established competitor but you won't be able to implement this powerful strategy.
So the first thing you need to do is build the value You do this by highlighting the differences between your product / service and everyone else's. The more distinct your product or service is, the more people are willing to pay to have it. People will agree this makes perfect sense, but this isn't applied aggressively enough to be effective.
Value Divergence
Secondly, where most marketers go wrong, is they start off asking the wrong questions like:
“How I can do this as cheaply as possible? ” So they cheap out on marketing to reach the prospect (a key part of driving people into your business) and the business just withers as a result.
The real question you should be asking is:
” How can I structure my business, so I can outspend the competition? ”
This is how you create real market advantage.
Now there are 3 ways to approach this:
1) Focus on increasing the value of your product
2) The Sequential selling strategy ( Selling a series of products to increase the overall profit of from each customer client )
3) Doing Both (My Preferred methodology)
The key is to maximize the value of each customer or client, so you can spend more to reach them without harming profits. Now maybe you're thinking you will deter “buyers” from your business. If that's the case, target a market where money is no issue. There is a huge myth that money is tight, but the truth is more money is being spent in today's economy than ever before and somebody is always willing to pay the fee if you create a strong enough case. A good example of this is the http://www.jamesedition.com , this is a site that specializes in high ticket luxury items from watches to helicopters all for a very high price. At the time of this writing the cheapest helicopter on their site is $ 1,540,000.
Now at this price, they can pretty much afford to spend whatever they want to drive new customers, because they only need one sale to make some good returns. If you think that's an extreme example, let's look at a more straight forward product. Let's take Starbucks, they sell coffee and any other treats that complement coffee, they're currently priced at the 3x higher than their closest competitor in their market for ultimately the same service (In fact it's actually less service, cause they don't even bring the coffee over to you in my experience anyway).
So at those prices, do you really think any of their closest competition can compete? And if they try to compete … how long before they stop making any profit on their sales and go out of business anyway? This could give you huge leverage in your market, that will allow you to crush the competition.
So you need to be thinking about “what could I sell at a high price (or up-sell to a higher price) that would allow me to spend more to acquire a new customer / client for my business?” Because ultimately the less units you have to sell to reach a $ 1,000,000,000, the better financial advantage you'll have. So take a look at your current business and identify how many units you would need to sell to make a million. Now look at how you can reduce the number of units you need sell to reach that same goal and your 80% there. The last 20% is your implementation, its one thing knowing this strategy but it's another thing to take action. There you have it you have a simple way to see big gains in your business with minimal effort on your part. I hope you've got massive value from this article
Until next time
ES Marshall
