by Mitche Graf
How do you create value for yourself? One of the key ways to create a higher perceived value is to under-promise and over-deliver every time. If you tell your customer their portraits will be done in four weeks, make sure they are ready in three. If you quote someone $500 for their portrait package, come in less. It’s all part of giving your customers that positive experience that will reap rewards for years to come.
Value is not the same as cost. Cost is what we pay to purchase something. The value of something to our customers needs to be significantly more than the selling price or they don’t have an incentive to buy. Let’s say you have a product in your studio that sells for $100, or should I say that you want to sell for $100. I think most of us can think of something in our studio that sells for that price point. Through all your marketing efforts, advertising, promotional pieces, positioning, and image creation, you want customers to flock to your studio and pay $100 for a Black Super Sonic Whatsahoosit. Now, whether you are successful at selling the Black Super Sonic Whatsahoosit is completely dependent on the value or the “perceived value” it has to your client. Basically, one of three marketing phenomena are going to take place.
The first phenomenon is that your client’s perception of your Whatsahoosit’s value will be $50, in which case you will have to discount by 50% to have a successful campaign. This is a popular technique before or after the holidays for many department stores. They motivate us with a very deep discount to lure us into the confines of their store in the hopes that we will purchase more than the item that is 50% off. Groceries stores are famous for this technique. They will run an ad for $1.49 milk, $0.29 Black Olives, or ten ears of corn for a buck. On your way to the farthest corner of the store to pick up your gallon of milk, you pass large end cap displays with 600 rolls of paper towels or 1,000 cans of pumpkin pie filling. You can rest assured those items carry with them a nice profit margin. The stores intimately know through their marketing research that for every ten gallons of milk they sell at $1.49, they will also sell a fair number of other products. They make up for their discount on milk with sales from other high-profit items. This technique is called using a “loss-leader” to attract customers and can easily be adapted to a smaller business. In our industry, it’s most prevalent in the Senior Market, where sessions are offered at pennies on the dollar or free. These “specials” attract the seniors into the studio and the volume is made up with sales from their packages and wall portraits. If you have a strong sales program and effective sales people to work with, this can be an effective strategy.
The second phenomenon is that your client’s perception of your Whatsahoosit is exactly at $100. This strategy is worked to perfection by companies like Nordstrom, The Bon, or Lexus. They create a demand for their products in such a way that we will gladly pay the asking price, just so we can be associated with that product. It’s more about our image and making us feel special than what price we pay. They have made us believe that the price really isn’t that important. We want to belong to the “club,” so to speak. When you go to a Lexus dealer, the asking price is also the selling price. No dickering, no negotiating. If you want to drive a Lexus, this is the price. If you are a Nordy, someone who shops at Nordstrom, you know that they do not offer big sales, except for once a year. The rest of the year we will pay their asking price. If you want what they sell, you will pay.
The third phenomenon is the perceived value of the Whatsahoosit. You manage to create a “perceived value” in the mind of the customer at a point above $100. Maybe it’s $120, $150, or even $200. The greater the discrepancy between the selling price and the perceived value, the higher the level of motivation your customer will have, and you will achieve a greater level of sales. The perceived value of the object is created by adding additional value to your customer’s purchase. Things like including a frame at no charge, including a free portrait, giving them a mini-2 way portfolio, a no charge session or posting the images online. Posting with Collages.net allows me to greatly increase the perceived value of my products. The site’s presentation, flexibility, and ease of use multiplies the additional value of the product for my customer. The sky really is the limit here and the more creative you get, the better your response will be. Remember one of the basic rules of marketing: either you are different and unique, or you are out of business. Find out what everyone else is doing, then don’t do it. Run as fast as you can in the other direction. This is how you guarantee you will separate yourself from the rest of the pack!
Another example of this technique is the infomercials on TV. They will spend the first 25 minutes of the show creating a value in our minds of $19.95. And most of the time, we probably believe that’s what the product is worth. Then all of a sudden, they sweeten the pot with “if you call in the next seven minutes, we will include a second one absolutely free!” You see it time and time again and obviously it works or they wouldn’t continue doing it.
If the value in the mind of the customer is greater than the asking price, BOOM!! You have a good chance of making the sale! So the bottom line in all this is simple. Always give your customers value that is greater than the price they pay. This brings up the question of the day. How can we create a value in our products (perceived or real), that motivates people to want to do business with us? Perceived value is strongly influenced by emotion, ego and personal image. These things are intangible and should all be considered in your marketing programs.
Here’s a rule of thumb I encourage you to make part of the fabric of your business: Don’t discount. Give stuff away. Let me say that again. Don’t discount. Give stuff away! When you discount you penalize good clients and attract the price shoppers. Instead of offering some sort of discount to attract clients into your business and diminishing the perceived value of your products, give them something for free that adds value to their purchase! And the fun part for you as a power marketer is that you can do anything you want just make sure it’s something they can’t get from any of your competitors. Whatever you do needs to make sense financially, and only you know what your restrictions and limits are.
Regardless of the outcome of your ideas, you must be willing to risk failure in order to attain the highest level of success. You will not be able to discover new lands unless you risk losing sight of the shore. Be bold, be adventurous, and have some fun! As you can see, creating value for yourself and your company takes on many different faces and comes in a vast plethora of colors. It’s all up to you and what your goals are in life. It’s very easy for us to fall into that old management trap and get caught-up in the day-to-day details of running our business. We end up running our studios instead of designing our lives. We all fall prey to the day-to-day stuff such as answering phones, meeting with clients, masking negatives, managing our digital files, ordering supplies, and mowing the lawn. Before we know it, our free time is gone, and there is no time for the things in life that are truly important, like family and personal hobbies. It’s OK to borrow other ideas from both inside and outside of our industry that we find to be enticing to our type of business. You don’t need to reinvent the wheel. Just find an idea that already exists and customize it to meet your personality and style. Since you can’t be all things to all people, find what you are really good at, and make it your trademark- your personal stamp. The day of the Jack of All Trades is long gone, and the age of specialization is upon us. So whatever position or niche you want to occupy in the customer’s mind, everything you do should be consistent with that objective.
We have the honor and the privilege to not only sell fine products and services to our customers, but to sell ourselves as well. Believing in yourself and your abilities as both a professional photographer and a Power Marketer can bring you rewards too great to number. The challenge of creating effective marketing programs that positions yourself in exactly the place you want to be can be difficult at times. However, it can also be one of the most fulfilling and rewarding feelings you will ever have, but you have to be willing to run away from the rest of the crowd. Separating yourself from the rest of the pack is never easy, but can take you to places never dreamed of, if you are willing to take the risk. Life is NOT a spectator sport!
About the Author:
Mitche Graf has a passion for sharing his “Power Marketing” techniques with other professional photographers, and this has allowed him the opportunity to lecture in over 40 states and 6 countries around the world. He can be reached at www.powermarketing101.com or by calling 888.544.4149.
Creating Value-Real vs. Perceived