Posted by:
Bob Bly
August 5, 2008
Issue #474
Ask most experienced direct marketers "What’s the best price to charge for my product," and the answer will be: whatever the market will bear.
In direct marketing, we can test prices and quickly see which is the most profitable - generating the highest return on our marketing dollars (ROMD). And, surprisingly, tests show that higher prices sometimes generate more orders than lower prices. In one classic example, a publisher was offering a service teaching presentation skills to business executives. When they tested $197 vs. $297 in their advertising, $297 was the winner.
Most direct marketers conclude that if the higher price wins, they should go with that. But while this is a sensible strategy in most instances, are there any situations in which charging a too-high price may come back to bite you … even if your price tests show the higher price to be the winner?
I can think of several.
The first is when pricing professional services.
GD, a pricing expert, once told me that the ideal price level for professional services is in the middle of the top third - NOT "the most you can get."
Let’s say the hourly rates for service providers in your industry range from $100 at the bottom to $400 at the top.
You don’t want to be in the lower third of the price range, charging $100 to $200 an hour, because prospects equate a bargain price with inferior quality.
Pricing in the middle range, at $200 to $300 an hour, isn’t bad. But it makes you one of the herd - a commodity.
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Posted by:
Bob Bly
July 1, 2008
Issue #449
"Any fool can criticize, condemn, and complain and most fools do."
Benjamin Franklin
Many years ago, I taught a class at the Learning Annex in New York City on how to make a six-figure income as a freelancer. One student, JR, wanted to break into writing TV commercials for Madison Avenue, and he had devised what was (according to him) a brilliant self-marketing strategy for getting hired.
In actuality, it was the second-worst self-marketing idea I’d ever heard in my life.
JR told the class that he had written some "brilliant" TV commercials.
The Super Bowl was only a few weeks away at the time. JR’s strategy was to show up at the offices of Madison Avenue’s biggest ad agency and show the copy for his commercials to the creative director.
The creative director, he reasoned, was under tremendous pressure to produce great Super Bowl commercials for the agency’s clients. By bringing those great commercials with him, JR would save the day - and be hired at an enormous salary.
This was a terrible idea for all the obvious reasons:
- All the commercials for the Super Bowl had been written and shot months earlier.
- The creative director had never heard of JR. She didn’t know who JR was or whether he had any qualifications or talent. So the chances of her agreeing to see him were miniscule to none.
- JR had no idea which of the agency’s clients were going to be running Super Bowl spots. Even if he did know, he hadn’t been briefed on the product positioning or the campaign strategy … so how could he possibly write commercials that achieved the clients’ marketing objectives?
I gently told JR - and the rest of the class - that doing work on spec for a client who hasn’t asked you to do so is an absolute waste of time. However, stupid as it is, there is a self-marketing strategy that’s even worse: giving an unsolicited critique of something a potential client has done - a new product design, an ad campaign, a website - in the hopes of being hired to fix it.
Why is giving an unsolicited critique even worse than doing unsolicited work on spec? Well, think about it.
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Posted by:
Bob Bly
May 8, 2008
Issue #413
I won’t deny that cold-calling can work. Yet in 99 out of 100 cases, my advice is never to do it. The reason is that, even if the prospect on the other end of the phone expresses interest in your services, the very fact that you cold-called him puts you in a weak position - for three reasons.
First, people want to deal with vendors who are successful, not those who are desperate and need the work, right? Well, when you cold-call, your prospects assume that you are not busy. After all, if you were, you would not have time to sit there calling strangers and asking them for their business.
Second, cold-calling puts you at a disadvantage when estimating prices and quoting fees.
A large part of what determines how much you can charge is the law of supply and demand. When the demand for what you sell outweighs your supply, it’s a seller’s market and you can name your own price. By cold-calling, you are signaling to the prospect that the demand for your services is less than the amount of time you have available. Therefore, prospects generated by cold-calling are more price-resistant - and more likely to haggle.
Third, cold-calling puts you in a weak position when negotiating terms.
Again, cold-called prospects know that you want and need their business. You are perceived as being easy to hire, and, therefore, they feel they can dictate things like deadlines, payment schedules, and work arrangements.
Why is cold-calling so ineffective? Because it violates the "Silver Rule of Marketing."
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Posted by:
Bob Bly
January 24, 2008
Issue #339
Is the “information explosion” a good thing for information marketers? Actually, it’s a mixed blessing:
- People have too much to read and not enough time to read it.
- More and more information is competing for their attention.
- There is a proliferation of low-cost/no-cost information sources eating into the market for your expensive information products.
Fortunately, you can still succeed in selling information by mail. It’s tougher than it was in yesteryear, I think. So here are some rules and guidelines formulated specifically for information marketers competing in the Information Age:
- Narrow the focus. Although the most profitable product may be one with wide appeal, such as Joe Karbo’s “Lazy Man’s Way to Riches” or Bob Kalian’s “A Few Thousand of the Best Free Things in America,” “goldmine” concepts such as these are difficult to come by. Today we live in an age of specialization. People have narrow, specific areas of interest and eagerly seek the best information in these niche areas. Match your own interests and expertise with the information needs of an identifiable market and you’re on your way.
How big must this market be? Jerry Buchanan, publisher of “Towers Club Newsletter,” a how-to newsletter for information marketers and self-publishers, says that “any group large enough that some magazine publisher has seen fit to publish a magazine about them or for them” is large enough for your purposes.
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Posted by:
Bob Bly
June 21, 2007
Issue #157
Using testimonials – quotations from satisfied customers and clients – is one of the simplest and most effective ways of adding punch and power to brochure, ad, and direct mail copy.
But how do you get testimonials? How do you use them?
Here are some tips for using testimonials:
- Always use real testimonials instead of made-up ones. Even the most skilled copywriter can rarely make up a testimonial that can match the sincerity and credibility of genuine words of praise from a real customer or client.
If you ask a customer to give you a testimonial, and he or she says, “Sure, just write something and I’ll sign it,” politely reply: “Gee, I appreciate that, but would you mind just giving me your opinions of our product – in your own words?” Fabricated or self-authored testimonials (those written by the advertiser or their copywriter) usually sound phony; genuine testimonials invariably have the ring of truth.
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