Many years ago, I learned a memorable lesson from an
old friend I worked with - one of America's top seminar marketers, Doug Hall.
Doug had just taken over a number of troubled Evelyn
Wood Reading Dynamics (speed-reading) franchises and was determined to quickly and dramatically turn these
losing territories into heavy-duty money-makers.
One of his earliest decisions was to have an enormous effect on the success of the company. (Doug's shrewd marketing thinking was ultimately responsible for his
becoming Evelyn Wood's President and Chief Operating Officer.)
Here's the story . . .
Doug took a look at the $195 seminar price and ordered
an immediate price INCREASE.
Needless to say this caused some consternation among
the people who actually had to sell the course. Many salespeople argued that it would be an impossible job
and even encouraged Doug to cut the cost of the seminar.
Doug explained that the key to real financial success
depended on the company floating the price upward until real sales resistance was met.
The $195 price was raised by $50 (in a media-isolated
test market) and the results were remarkable. Sales actually went up as the price increased!
Another $50 price hike was instituted and again sales
continued to climb. Prospects didn't even flinch. To make a long story short, Doug floated the price up to
. . . get this . . . $395 before he hit resistance and had to back off!
In other words he doubled the price of his product without any negative effect on sales!
When Doug took over Smokenders years later, he did the
same thing and again floated the price up and up until the marketplace inevitably told him to cool it.
How about YOUR product or service?
Are you pricing it too high or too low?
The only way to find out is to do a little testing and get some solid answers.
By the way, I have discovered that many companies are
simply not interested in finding out what their product or service should really sell for. They pick a
number that seems to make sense, cross their fingers, and go for it.
What a pity. With a little testing, they might be in
for some pleasant surprises.
Funnily enough, companies who don't want to test something important, like price, often urge me to test low-impact variables. First-class stamp vs. metered, etc.
Here are some significant variables, other than price,
that you might want to consider testing:
Your offer. As Bob Stone, the dean of the direct response business, put it "The propositions you make to customers can mean the difference between success
or failure. Depending on the offer, differences in response of 25, 50, 100 percent and more are commonplace."
Your list. Rather than mail to everyone on a single
list, rent the minimum number of names on a few lists and test an identical package with each one. Once you've selected the winner, you can roll out in force.
Your media buys. How do you know which publications
are exactly right for your product or service if you don't give them a try? Remember, you can always test a
small-space ad in several publications as a measurement tool. After you determine the magazines you want to be in, you can go full page, full blast. Also, don't forget to experiment with different ad sizes. Starch INRA Hooper testing proved that one-third- page ads can actually score higher than their half-page counterparts.
The take-away message this month? It doesn't always
make sense to "go with your gut" and make key business decisions based on instinct. If you possibly can, do
some testing first and let the marketplace tell you what to do.
Do you need me to create some moneymaking opportunities for you? Give me a call and let's talk about how I can write a killer letter, email, Web copy, whatever for your business. Give me a call at (415) 461-0672 and let's talk. My fees are affordable and my copywriting can make you money. CLICK HERE for proof!