Horses, Sweet Potatoes and High Prices

"The oats are always cheaper after they have been through the horse."   

- Zig Ziglar

 

I have always loved this quote and I remembered this article from a while ago that provides some insights into how to overcome the price objection. It is not your prospects fault for being too price sensitive. It all starts with you and how you convince them of the value of what you are selling. What about the sweet potatoes? Read on.

3 Ways To Head Off Complaints About High Prices
By Howard Jacobson
October 24, 2012

If your prospects are too darn price-sensitive, stop blaming them. It's your responsibility to educate them about the difference and value of your stuff. Use these common-sense techniques to do just that.

Yesterday I spent three hours as part of a volunteer "Crop Mob" at a local farm, helping to bring in the sweet potato harvest. I learned a lot about farming, but the most significant lesson had nothing to do with growing or harvesting. My main thought was: "Sweet potatoes are a damn bargain at the farmers' market. I don't care how much they cost, the farmer didn't get paid enough." Once you realize how much work goes into them, lots of things seem like a damned bargain.

What Don't You Get Paid Enough For?

What goods or services do your prospects and customers take for granted? Which ones get the most price resistance? If you find yourself constantly competing on price or justifying your prices, you've got a buried sweet potato problem.

If your prospects walk past the overflowing baskets at the farmers' market or farm stand, perhaps they just aren't educated enough to know the intense work and costly inputs that go into producing that bounty. So they wonder why it isn't cheaper.

As you can imagine, a farmer working his ass off to bring in $24,000 a year can get pretty upset by an upscale suburban professional who just got out of a Lexus SUV professing shock and outrage at sweet potatoes at $3 a pound.

But it's the farmer's responsibility, not the consumer's, to make the value clear.

What's Your Big Difference?

If you offer a premium product or service, then it's even more important to educate your market about the differences. After all, I can get industrial genetically modified sweet potatoes, loaded with pesticides and herbicides and synthetic fertilizers, for about 79 cents a pound at my local Kroger.

But the organic, pesticide-free, sustainably grown heirloom sweet potatoes available from my local farmer cost four times that. Until yesterday, I wasn't all that clear on the reasons.

Now I see how much effort goes into preparing the beds with hand tools and small tractors. Into propagating the slips ("seedling vines") in greenhouses. Into planting the beds. Into laying and monitoring thousands of feet of drip irrigation. Into protecting the growing plants from flea beetles, hornworms, leafhoppers, weevils, and rats. Into gently digging the beds to assess growth and harvest readiness. Into checking the weather hourly in fall to be ready in case of frost. Into digging out the harvest (or marketing to volunteers to help--and there weren't that many of us!).

Now I'll pay that sweet-potato premium gladly.

Three Ways to Communicate Value
How can you invite your customers and prospects behind the scenes, so they can vicariously experience and appreciate the efforts, costs, and sacrifices that go into the quality of your stuff?

You don't have to literally engage your prospects in your work. But there are plenty of ways to demonstrate that your prices are fair.

1. Demonstration of Difference

Joel Salatin, lunatic farmer, shares his blow-by-blow sales technique at his local farmers' market, displaying his eggs and chickens side by side with industrially produced eggs and birds.

The visual of the brightly colored yolk and the tactile experience of the firm flesh enable Salatin to make his point that his animals are healthy, and so eating them is better for your family.

How can you demonstrate the difference between your premium products and services and the competition's shortcuts?

An accounting firm can anonymize and post two sample returns for the same household, showing the one done by their accountants generated 30% more deductions.

A tree service website could show videos of the owner meticulously taking care of his chain saw, using old fashioned Oregon chain saw files that are no longer in production.

You can post video and audio testimonials of clients telling their stories of how you went the extra mile for them.

2. Supply Chain Transparency

When the late, great Tom Hoobyar was selling valves to the pharmaceutical industry, he knew a lot was riding on the performance of those valves: Millions of dollars of pharmaceutical gloop in giant vats could be lost if a valve failed.

So he created a slide show that he called "The Odyssey of a Valve" that followed a hunk of metal from its birth inside an open pit mine to its final shape as a highly machined, highly polished, highly tested valve. (You can find the slide show here.)

Anyone watching that is filled with confidence about the manufacturing process, and clearly is not in a mood to quibble over a few dollars. The effect of this slide show is a little like the rant that my friend Michael's father made in 1981 when I complained to him that the rate for a first class postage stamp had gone from 18 to 20 cents:

"Let's get this straight: You want an organization to send someone to your house and pick up this letter, walk it to a truck, drive it to a post office, sort it into a sack, put it on another truck, drive it to an airport, carry it to a plane, fly it across the country, unload it onto yet another truck, drive it to another post office, sort it, put it in a sack, drive it to your friend's street, and walk it to their mailbox for 20 cents--and you want change?!"

With this perspective, I never complained about another postal rate increase.

3. Teach Your Prospect to Do Without You

I discovered the potential of this means of communicating value when my book, AdWords For Dummies, was first published. At 408 pages, it was pretty comprehensive in its day (2007). And it laid out in clear detail, with lots of screen shots, exactly how I did what I did for clients.

I kind of figured that that $16 book had ruined my professional career as a consultant. After all, why would anyone pay me lots of money to do what I had just revealed in its entirety?

Naturally, the opposite happened. Once people read the book and discovered how complicated and time-consuming AdWords could be, they were happy to hire me to do it for them.

If you can teach your prospects to do without you, that's one of the best backhanded ways of demonstrating your value. They'll quickly see that they lack the experience, time, and desire to accomplish what you do at anywhere near your level of quality and efficiency.

(If this isn't true, of course, then you don't have a real business anyway, and nothing I'm suggesting is going to save you until you find a way to add real and enduring value.)

Now if you'll excuse me, I'm going to make a sweet potato pie. Because ain't nobody can make a pie like I can!