As we have quite a lot of new consultants going out to their first events, I thought that it would be a great time to have a chat about pricing. You see, as a new business, people sometimes panic about pricing, particularly if someone is selling something similar at the same event for a cheaper price, so lets think about that a bit in a slightly different context, and you’ll see that its not a majorly important factor.
Do you like Chocolate Digestives?
Probably, most families and households in the UK buy a packet of chocolate digestives each month. But the price of them varies wildly, from store to store, and also within the store from week to week. In fact, it’s fairly safe to say that everytime you buy a packet of chocolate digestives there is a 100% chance that you could have got an identical (or very very similar product) cheaper, and within 200m.
Shall we test that thinking?
Have you ever done your big grocery shop in one supermarket, and decided not to put chocolate digestives in the trolley, because you’re going to go to another supermarket afterwards to buy them cheaper? No. Be honest, you haven’t – not for just chocolate digestives. So, what this tells us is that people value CONVENIENCE, and that they are prepared to pay extra for a product to have the convenience of being able to buy it in a time and location that is more convenient to them.
Have you ever (and I mean ever, even once) bought McVities chocolate digestives when they were sat right next to the supermarket own brand ones that were 50p cheaper? Be honest, you have haven’t you? and 50p is quite a big percentage in terms of the cost of a packet of biscuits. So, what this tells us is that people value BRAND, and that they are prepared to pay extra the have the brand of product that they are comfortable and familiar with.
Have you ever bought McVities or Foxes or Cadbury’s chocolate digestives because you prefer the taste and the texture of the biscuits? You know that there is the Savers Choccy Digestives sitting there for only 27p, but you’d rather spend £1 to have the others? So, what this tells us is that people value QUALITY, and that they are prepared to pay extra to have a higher quality product.
Have you ever compared the price of chocolate digestives in all the different supermarkets and stores before you purchase them? We tend to do this with big ticket items such as a TV or a Fridge, but do you do the same level of price comparison due diligence for every single purchase that you make? No, you don’t. You know that in all reality they may well be cheaper in other places, but you’re not going to take the time and effort to check it out. So, this tells us that people don’t always care that much about PRICE, and that they don’t always bother to research to the n’th degree the price of all comparable and similar products in the local area.
Have you ever gone online and purchased just a packet of chocolate digestives because its the cheapest way to buy them? No, you haven’t, because you don’t tend to make individual purchasing decisions separately for each and every product you buy.
Have you ever purchased a packet of chocolate digestives that are far bigger than you actually need? Because the price of the twin pack is only 50p more than the single pack and you get twice as many biscuits? Yes, you probably have, because VALUE FOR MONEY, is important to you, and its better value to buy the twin pack, even if you know you don’t need that many (note the word need, lol, because in my house those extra biscuits will definitely somehow end up eaten, even though we don’t need them).
Lots of people buy Chocolate Digestives in Marks and Spencer, again, knowing that they are paying more than they would for the same product in Aldi, so why do they do this? Because although Aldi has cheap prices, it’s not so hot on CUSTOMER SERVICE, there are only a few staff, and if you’re slow in unloading your trolley and bagging it up you’ll soon hear about it from the people behind you. Much nicer to go to M&S where the kind staff will pack it all in the bags for you.
Have you ever gone into a store and they haven’t had the product that you wanted – maybe there weren’t any Milk Chocolate digestives. Did you leave with nothing? Did you leave the supermarket, get back in the car, and drive another 3 miles to another supermarket just to buy chocolate digestives Or, did you simply just buy an alternative product? In reality, once people have decided to buy from you, if you don’t have exactly the thing they were after they will choose an alternative.
Would you buy your chocolate digestives from a dirty shop? Even if they were half the price of everywhere else? Probably not, because SAFETY & CLEANLINESS is an important factor particularly when you’re buying food, drink, products for your children etc…
Have you ever avoided a particular shop because the staff are unfriendly? Even though the products are cheap?
Do you know that sometimes people even buy chocolate digestives in Waitrose? Imagine that!! They know that by even walking through the door they are going to pay 10-20% more on every single product that they put in the trolley, but they still go there and buy chocolate digestives? Why do they do that? Well it’s all about the ENVIRONMENT, they love shopping with posh people and love being seen shopping with posh people, and everyone knowing that they’ve got enough money to pay more money for Chocolate Digestives than they have to and that they dont care about it.
Have you even paid an extortionate price for a packet of chocolate digestives when you’ve been out with the kids, and they’ve been hungry and moany, and you’ve been filling up the car with petrol, and the garage has a packet of chocolate digestives there, twice the price of normal mind, but you’ve thought “that will sort them out for the time being”………… Well, You know where this is going…….
Every week we buy hundreds of products, and price is one of the factors that we consider, but never the only factor, and most of the time it’s outweighed by other factors and influences – Convenience, Brand, Quality, Value for Money, Customer Service, Staff, Environment, Location etc.
So why does this matter in my Kids Bee Happy business?
So, when you are pricing your products, and comparing prices with other suppliers and entertainment at your events, its really easy to fall into the trap of panic thinking “Oh, I’m more expensive than X, I need to drop my prices”. But really, that’s not how the customer is thinking. If the whole world simply bought the cheapest products then 99% of businesses wouldn’t exist, they would all have closed down, because there is always someone out there prepared to sell cheaper.
So what do I do?
Firstly, you reign the brain in and you get that naggy voice in your head under control. And you accept that there are a very small number of people who may decide not to make a picture with you that day because there is a cheaper alternative, and that’s OK. But the vast majority of the people are looking for more than just the cheapest price – and we’re going to concentrate on those.
Secondly, you focus on the other elements that people want – and pay for. You set up your stall in a professional manner, clean, safe, tidy. You promote your brand, and you make sure that you are the best you that you can be.
And thirdly, you provide excellent customer service, you avoid being an Aldi (sitting behind a table waiting for people to come to you) and you turn into a John Lewis upfront, outfront, talking to people, helping them, answering their questions.
But, does it work?
And lastly, one final question for you – have you ever gone into a supermarket for a packet of chocolate digestives, and come out with 2 bags of shopping? You know you have. And the reasons why you did that had nothing to do with the price of the chocolate digestives – all of that extra shopping (that you didn’t actually need) came about because of everything else in this article – Convenience, Quality, Brand, Value for Money, Customer Service, Cleanliness and Safety, friendly staff, welcoming environment.
And if it works for the supermarkets – it will work for you.