Seth's Blog : On pricing

View Online On pricing Pricing is an exchange of value. This for that. But price is also a story. When you have competition, your story doesn’t have to justify the absolute price, simply the difference between you and the next-best option. Price is based on value, not on the cost of production. Thanks to Baumol’s cost disease, productivity doesn’t always correlate with the price of labor. Luxury goods are worth more because they cost more. If you sell a luxury item, raise your price and then improve the story to make it a bargain. It’s better to explain your fair price once than to apologize for low quality over and over. Asking, “what’s your budget?” is lazy and selfish. Your job is to figure out what your client wants, what they’re afraid of, and what sort of story they are eager to buy. When everything else is equal, we always want the cheapest option. But everything else is rarely equal. When someone says, “that’s too expensive,” what they mean is that the story you’ve told them so far (and the reputation you’ve earned) doesn’t match the price you’re charging. You probably don’t need a lower price, but you might need to earn a better story. “It might not be for you,” is almost always part of “we make the best (for someone).” Bargains, sales and coupons are a sport and a narrative. They’re not just a discount, they create their own sort of value and expectation. Convenience is often underappreciated as a component of value. The customers you get because you are the cheapest are the first ones to leave when someone else is even cheaper. The problem with racing to the bottom is that you might win. The most resilient slogan you can earn is, “you’ll pay a bit more, but you’ll get more than you paid for.”          • Email to a friend • You're getting this note because you subscribed to Seth Godin's blog. Don't want to get this email anymore? Click the link below to unsubscribe. Safely Unsubscribe • Archives • Preferences • Contact • Subscribe • Privacy Email subscriptions powered by FeedBlitz® • 650 E. Palisade Avenue Ste 2, PO Box 173 • Englewood Cliffs, NJ 07632

Seth's Blog : Avoiding the purity loop

Some vegans don't eat avocados. They're concerned that the bees that are trucked in to pollinate the trees are mistreated, and so they choose to not support this practice. But we live in community, and someone running a vegan restaurant or serving a ... ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  View Online Avoiding the purity loop Some vegans don’t eat avocados. They’re concerned that the bees that are trucked in to pollinate the trees are mistreated, and so they choose to not support this practice. But we live in community, and someone running a vegan restaurant or serving a meal to vegan friends, concerned that they might offend, doesn’t serve avocado. A few strong opinions change the culture. And so the cycle continues. Humans care about status and affiliation, and both are at play in a purity loop. One can earn more status by caring more about the issue that others are adjacent to. And so the loop gains momentum. Once a few people make it clear that they’re more orthodox or progressive or concerned or strict or unhypocritical or obedient, others seek to claim the same status. And that becomes a point of affiliation. Just about every tribe goes through these loops. Four hundred years ago, neck ruffs became popular among the aristrocracy in Europe. The neck ruff began as a modest collar but evolved into enormous pleated confections that could span two feet across. At their peak, ruffs became so large that special eating utensils with extended handles were invented to allow wearers to get food to their mouths. Some ruffs were so tall and stiff that wearers couldn’t turn their heads and needed help eating. The instinctual response is to criticize the newest form of purity as absurd. But of course, the absurdity is part of the status on display. Perhaps it makes more sense to see the loop at work and get back to the work at hand. “Shut up and drive” is the answer to an argument about what song is playing on the radio. We can tune the radio as we go, but we’re here to drive this thing to where we’re headed. Enrollment is at the core of the mission. Where are we going and why? If it’s not helping with that, let’s drive and work on it as we go. Everyone is entitled to their own take. But when we focus on purity and status at the expense of the journey, the distraction costs all of us. We’re going. Come if you’d like.          • Email to a friend • You're getting this note because you subscribed to Seth Godin's blog. Don't want to get this email anymore? Click the link below to unsubscribe. Safely Unsubscribe • Archives • Preferences • Contact • Subscribe • Privacy Email subscriptions powered by FeedBlitz® • 650 E. Palisade Avenue Ste 2, PO Box 173 • Englewood Cliffs, NJ 07632