Tuesday, January 31, 2012

Learn How to Use the Place Strategy that Supports Premium Prices

America divides into niches and subcultures.

Each individual belongs to at least one of each but most belong to several of each.

Understanding how that niche or subculture membership and affinity, stretches the price elasticity of just about all goods and services, can put a great deal of lost money into your bank account.

Simplistically, niches are occupational and vocational; subcultures are by interest, belief, and activity. For example, insurance salespeople are a niche and deer hunters a subculture.

By further subdividing niches and subcultures, you get life insurance salespeople, property and casualty insurance salespeople, and specialized property and casualty; you can even find a niche of insurers for collector cars and rare art works.

In the subculture space, you can find deer hunters who use only bow and arrow and deer hunters who only hunt in the Midwest.

Most people have very strong identification with, and affinity to, whatever niches, sub-niches, and subcultures to which they think they belong to and they tend to buy a lot of things somehow linked to those niches and subcultures.

The deeper the commitment to niche or subculture, the less price matters for the precisely matched product. More price elasticity exists when moving a generic product to the niche.

Several key links about product / place / pricing must be cut. One link that must be cut is the value, in your mind, of the ingredients that comprise the product. Another link that must be cut is that some product comprised of the exact same ingredients may be readily available at a substantially different price, at a different place. Cutting this link is essential.

Place in this context is not necessarily a geographic place but a niche or subculture.

Again, price pressure goes up, if you can move a product from generic or mainstream, to niche or subculture. This why we add value to a generic product; it makes it customized or match a specific niche or subculture or client or customer.

Here are several key lessons to follow in order keep from being stupid with your Place Strategy. You must learn to make your sales in a competitive vacuum or you must get comfortable with selling at dirt-cheap, forced-down prices with nominal or commodity like profits.

Lesson 1 – Avoid loading the wagon and then wonder who might buy what you have to offer.

Lesson 2 – Avoid one product, one size fits all approach. Modify, reposition, repackage what you have for different markets or different segments.

Lesson 3 – Avoid treating all places (such as media) the same. While there is undoubtedly some cross-over between The Robb Report, New Yorker, and Town & Country, do not put the same generic add in all 3 magazines and expect stellar results; it will not happen.

Lesson 4 – Do not miss out on “unique” place opportunities. Nationally, or locally; offline or online, there are lots of unique place and media opportunities. Find and decide on these first; then work backwards to modify or engineer a version of your product or service for that place.

Lesson 5 – The riches are in the niches so don’t insist on one, simple business instead of a dozen small, market-matched vertical business under one umbrella. Some want to push out their generic offer to everybody and anybody instead of modifying and customizing their offering into a dozen niche markets because it is too much work; avoid this stupid thinking.

Lesson 6 – Almost everybody works harder than necessary for each dollar they make than selling in a place that limits price rather than a place that liberates it. For example, a John Wayne figurine sells in a lot of places for $15, $20, maybe $25 however in Cowboys & Indians Magazine, it can sell for $135 because people looking for cowboy stuff know they can go to this place, find what they are looking for, and don’t need to look all over, even if the price is less expensive. As an enticement, the seller might even add a simple ebook with a bio and list of John Wayne movies as a way of creating a simple John Wayne package, justifying the higher price in the mind of the buyer and differentiating themselves from those just selling the figurine. In this example, go where buyers of cowboy stuff go.

Lesson 7 –There is an app that lets you wave your phone over any item’s bar code in any store and instantly get prices on that item from Amazon and other e-commerce discounters. Avoid selling something easily commoditized and price compared in a place where such comparison is easy as that spells DOOM. If you insist on creating interest, offline, for item “x” in a new prospect’s mind, and then drive that prospect online, you are a market maker for six billion competitors and you are asking to be Google slapped. Learn to make sales in a competitive vacuum or you must get comfortable with selling dirt-cheap, forced-down prices and nominal profits.

If you follow these 7 lessons, you are able to get price out of the mind of a buyer of the products and services of your business. If you do not follow them, you will always be in a position where price is always an issue in the mind of the buyer and you will likely be challenged and always be suppressed by competition and commoditization.

It takes a while but many Internet Marketing entrepreneurs learn the Place Strategy. They learn to identify their target market with keyword research and keyword research tools as they know they can not guess what the market desires.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Place Strategy.

It looks easy but marketing is not a game for amateurs. Marketing is not just a battle of products. It is all about the strategy you use to benefit from the Place Strategy.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

A great book to read is "No B.S. Price Strategy“ by Dan S Kennedy as it was the source of some of the material contained in this post.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

Since this is the first post on this blog for the year, I would like to provide Best Wishes for a Prosperous New Year!

Be sure to share this post with anyone that you think would benefit from this message… thanks!