Where’s the easy money gone?
By St John Craner
We’re now witnessing the lowest form of marketing intelligence: sales (check out Lambton Quay – if you can get past the For Lease signs). It’s a bit like the sales rep that can only make his monthly sales target by dropping his price. What they’ve both forgotten is that they’re selling a price point, not the value of their product or service. They’re also setting an expectation…
As soon as you introduce price into a conversation that’s all customers will expect. Trying to then shift customers up the price ladder to pay more is a bit like trying to stop the tide coming in. It’s a suicidal, margin-killing spiral and it always ends in tears.
When everyone was splashing out on the big ticket items through easy credit and inflated house prices everything was easy. The money rolled in. No one had to work that hard for it. Then we got complacent. Which meant we got soft. What’s happening now is a healthy filter to find who is the fittest, who is the strongest and who will come out the other end.
Charities and non-profits are suffering even more. The sick irony is that many of them provide essential community services to those communities that now have the greatest need. But why didn’t they see the predictable funding squeeze coming? What plans did they have in place to offset this? Or did they expect the annual hand out rounds to keep coming? Funding was never easy for them but now with the major community gaming trusts down by about 30-50% it’s even tougher. Being a non-profit, for some, doesn’t mean being non-professional. Charities need to apply the same rigour and planning processes as their for-profit counterparts. And that might mean venturing outside DIY, in-house land and getting some external, professional assistance to help secure a bigger slice of a shrinking pie .
The easy money’s gone. Businesses and charities need to invest time and energy into defining what their true value is so they can attract the money that’s left by asking:
– what’s makes them unique or different?
– how are they better than their competitors?
– what things could they own or claim exclusively?
– how do they add or offer superior value to their customers?
– are they offering the things customers really value?
People only complain about price when they can’t see value. Prove your value and price won’t come into it (BMW, Apple, Harrods, Icebreaker).
In these tough times, attracting discretionary spend means applying discretionary effort i.e. hard work, thinking more vs. just doing, commitment, persistence and focus.
Nothing good ever came easy.