Trick Pricing
We are smart people.
We don’t get duped very often.
We know a scam when you see when.
We’re even smart enough to know that $9.95 is really $10.00
So why would we treat our customers in such a condescending manner. Do we really think that any of our customers won’t be smart enough to know this?
Now that we have answered this question let’s ask ourselves why you would ever engage in such trick pricing for our customers.
At last, we’re entering the age of ‘authentic capitalism’, and $0.99 cents isn’t fooling anyone. In fact, you’re quite possibly embarrassing yourself on a commercial level and damaging your brand or start up. The threshold price point is the biggest hoax in consumer marketing. My suggestion, is to have honest pricing. Charge to the dollar. Make it simple and gain respect simultaneously. Our customers won’t mind, really.
Who wants a pocket full of change anyway?
Trophy Ideas
Trophy Ideas shouldn’t be your first attempt at a start up.
Definition: Highly original and ‘expensive’ business concept which could change the behaviour of consumers, business or the world and make you rich in the process.
Trophy ideas are typically capital intensive and have long lead times to get up. They usually involve external capital. They’re often the domain of inventors. The reason that trophy ideas are onerous is that they don’t succeed very often and they take up the two most valuable tools we have, time and money, and lots of it. Sometimes people dedicate large portions of their life to trophy ideas. But we only ever here about the successful ones. An example might be the Dyson vacuum.
Here’s some startup blog advice if you want to go for a trophy idea. Do it after you’ve had some smaller successes first. Do it when you already have passive cash flow from another startup, business or investments. We should all pursue things that are worth doing, the trick is knowing the right time to chase them.
Territory
I just saw a stray cat enter our backyard much to the distain of our moggy. You know what happened…
There was a lot of hissing, a couple of left jabs with claws out, bushy tails and the obligatory chase up over the back fence.
Territory is about physical space, location, proximity to food, water and shelter. The basics which sustain life. Our cat was simply protecting what it needs to survive. Humans do it too. And so should your business or startup.
Cats are pretty smart. They know that there isn’t really enough room for two in most houses. It’s no different with brands. Great brands are always territorial. When the local alley cat turns up for a feed, the incumbent brand wont move to the left and share the food bowl. There’ll be fight, every time.
But the trick is this, brands are only territorial about their house (read here key distribution point). If you’re getting a great feed elsewhere, they won’t even notice. You can build some momentum and cashflow before they notice you’re gaining size and power. If you want to get off the street like your local alley cat, stop living day to day, then you and your startup have to find a new place without a cat. Be nice to the owners (your customers / audience), offer them something emotional and they might just adopt you.
Empirical evidence
By the time an insight is empirical, measured and proven, it is no longer an insight.
Here’s how startup blog defines the term Insight as it pertains to marketing:
A revelation of consumer understanding, which is not currently being leveraged for profit.
It needs to be a revelation to be an insight. If we are leveraging… “The insight of…” – that is the insight everyone agrees on and knows about, we’ll just be swimming in competitive soup.
Why I don’t promote Startup blog
I get told all the time my blog is quite good. I’m chuffed. It’s nice people get something out of it. And yes, it has grown in the almost 3 years it’s been going. Grown from 10 readers a month to about 30,000. And No.1 on Google for ‘Startupblog’. But I don’t promote it hardly at all, other than a tweet here or there. I’d rather people just find out. And here’s why:
As soon as we start creating stuff for the ‘popularity contest’ we start to compromise what we do. We’re doing it to win, rather than for the love of creation. Our work suffers and we start making it for ‘them’ instead of ‘us’. Slowly we evolve into a qausi-politician trying to please everyone and yet stand for nothing.
This sounds counter intuitive to all the marketers out there…. but, the world has changed. We used to make stuff for them, round the edges and then sell to everyone. But now they’ve already got more stuff than they need – physical and informational. So what we have to do now is create stuff we love and let the people catch up. The people who are in fact ‘us’. Our people, not them.
I’ll be blogging 10 years from now (among other things) and if I stay the course, they’ll keep coming, like they already have. The only promotion this blog will ever get is the Kudos it deserves from those who discovered it… and then spread it. Given I don’t advertise on it, or make a living from it – that’ll suit me just fine. My main goal is to take pride in my content – not my ranking.
Entrepreneurs ought there – create something you’re proud of.
When things are broken…
…fix them straight away.
Sure it will cost you more
Sure the budget doesn’t allow
Sure it was unexpected
Sure you can leave it for a while
But the reality is this – when we leave things broken, we leave a part of ourselves broken. it messes with the mind, and it effects our persona, our personal brand and our confidence levels. In short it messes with the mind. Show me a person with a banged up car or an unruly house and I’ll show you someone whose finances are not in order.
Don’t mistake what I am saying here. I’m not talking about wealth, I’m talking about attitude.
The attitude of people who fix stuff – is the same as the attitude of the people who usually find success. Success doesn’t tolerate letting things deteriorate – success always repairs anything which is broken. Success knows that it permeates the right culture and it makes us money in the long run.
Real world insight – Walk around
When is the last time you walked somewhere? You see more when you walk, the world moves in slow motion. You become closer to your environment. Speed is the enemy of insight in the real world. Ideas happen when you stop and watch them instead.
Slow down, see more.
Big lie
Greatest lie of all time:
Our ability to learn decreases with age. Bollocks.
We fill our hardrive with crap & use our ram as a funpark…
Simple maths
“…I would have, but I’m not very good at maths”. How many times have we heard that? I love quadratic equations and differential calculus as much as the next guy…
Good news bulletin: Simple Maths rules the business world.
If you’re familiar with the following symbols you’ve got all the number skills you need.
+ - x / % < >
You only need grade school math. But, you’ve got to be quick with your numbers, know which ones matter, understand industry averages and which ratio’s to look for – top of mind. The most important of all these symbols is %.
Everything that matters is represented as a percentage:
Gross margins
Net margins
Rates of interest
Return on investment
Price earnings ratios
Growth rates
Quick ratios
Debt to equity
Get to know your key financial indicators. Simple tools used on the share market are your best friend even for a small start up. Fundamental analysis is always based on ratio analysis.
Your company will only ever be what it earns and remember these two things that entrepreneurs often forget:
- Revenue must exceed expenditure
- The crocodile always gets the biggest piece!
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