SOWPub Small Business Forums - Question Regarding Local Business Services.

Quote:

Originally Posted by Glenn (Post 32061)

e - FRANK Hands them the list of his competitors and says, "This is a list
of my competitors who charge 60.00 an hour OR LESS. Call Them. Ask
them if they can Reduce your pain over the phone. Or In 2 Minutes
Like I just did.

OR - Pay me 120.00 Per Appointment. I don't really HAVE any
Competitors who can do what I do."

PEOPLE In Pain WANT THE BEST.

Not The Cheapest.

Especially when it comes to their Own Body!

Hi Glenn,

Thanks for sharing that case study!

Of course, you're right... If you said to someone, "I can make HALF the pain go away for $30, or ALL the pain go away for $120" - well, who would pick the $30 option, even though it's 1/4 of the price (and thus, better "value")?

There are other areas like this, often to do with medicine... People will pay whatever they can afford to cure a serious illness...

Higher prices can also mean higher perceived value. I believe it's in the book "Influence" (by Robert Cialdini) where he cites the case of a store which was selling jewelry (if I remember right).

The jewelry wasn't selling, so the store owner decided to have a sale. However, by mistake, instead of lowering the price, he accidentally RAISED the price! And...

The jewelry sold out!

People wanted the higher-priced jewelry more - since at the higher price, people perceived that it was higher "quality" than they thought it was at the lower price... Even though it was the same jewelry!

A man I know (his name is Brian), who's now in his 80s, was involved in the import/export trade in Hong Kong at one point, and he told me a similar story.

Back, many years ago, he imported nylon stockings (which were made in France) into Hong Kong, which at that point were a new thing, at least for Hong Kong. He sold them wholesale to many different stores in Hong Kong.

Most of the stores had trouble selling them - except for one store. That store kept coming back, over and over, asking for more nylong stockings - because they kept selling out!

My friend wondered what was going on. Why did all the stores have trouble selling them, except for one store, which kept selling out?

So, he went to visit the store. Then he saw what they were doing.

They had RAISED the price, and were selling the nylon stockings as a luxury item! The other stores had LOWERED the price, and were selling the nylon stockings as a discount item!

When it was "positioned" as a luxury item, with a price to match - back when it was new (for Hong Kong) - women went "gaga" over the "luxury" nylon stockings, and couldn't buy enough of them!

These "stories from the trenches" are always fascinating... :)

Best wishes,

Dien