SELLING A COMMODITY PRODUCT, AND STUCK ON SELLING CHEAP PRICES?
The truth is if you’re selling commodity driven product, like coffee, cakes, food …
It’s really hard to charge higher prices.
Here’s what I teach at my live events:
1. TURN YOUR PRODUCT IRRELEVANT
Coffee be damn if people spent $8 in Starbucks for 90% of milk and sugar syrup. The regular coffee in a coffee shop cost no more than $2, and actually contain more coffee.
Yet, why would people still spent hundreds of dollars with Starbucks every month?
Truth is, they’re not paying for coffee.
Instead, we are paying them rents for space and electricity!
Their core product, coffee, becomes a supplement of choice; a condition, in order to use their space and electricity.
For most people, spending money at Starbucks is no longer because of how good their coffee is. The big reason is because people needed a space for meetings, to work, or simply just to kill time waiting for next appointment.
They’re not fighting the war on product quality. They’re providing something else. Therefore, the prices of their product becomes an irrelevant choice to their customers.
The primary reason we decide if we want to spend money with Starbucks, or not; is determined by
2) Power sockets.
Not coffee quality.
That’s why they can charge $8 per cup.
In order to make this strategy a success, you need the following 2 ingredients:
2. FOCUS ON YOUR CUSTOMERS (NOT PRODUCT)
For this strategy to work, you have to know your target market like the back of your hands. Starbucks be damn if they’re trying to woo coffee drinkers.
Most coffee lovers, once they tasted “real” top notch coffee, they never find themselves drinking at Starbucks again.
Starbucks’ real target market is not the coffee lovers.
3. MAKE YOUR BUSINESS A MEDIUM
Starbucks acts like a medium for students, agents, friends, to rent their space and offering drinks as part of it.
You’re really just renting their space for a few hours and paying $5 – 20 per hour.
It’s almost like a cyber cafe in the past, where they rent out computers to you, and offer you instant noodles and drinks as part of the package.
If you can make your product irrelevant, and turn your business to become a means to their end, then it’s a natural process that prices will be irrelevant.
Look, I’m not saying ignore product quality.
Product quality IS important, it’s just not the primary core reason why most people spent their money with Starbucks.
So if you can change the rules of the game, you’ll own control of it.
DO THIS NEXT!
If you truly want your business to transform, it won’t change on it’s own. You need help, and here are some questions for you to do it yourself:
1. How can you turn your product irrelevant?
2. Who’s your REAL target market?
3. What’s the “medium role” your business can play in your customer’s life?