Stories Are Hard Pricing Is Easy
In baseball a tie goes to the runner. In the mind of your customer a tie goes to price.
This is true 100 percent of the time. If your brand equals another with a lower price you have lost a customer. It's that simple and that immediate.
The most misunderstood question in marketing today is, "How much is it?" There are exactly two biases contained within that question. 'How much' - is the bias of price. 'Is it' - is the bias of the story in the mind of your customer.
It is not possible to change the bias of price. It exists equally in all of us.
Some years ago 60 Minutes asked Bill Gates why he did not fly first class on commercial airlines? He replied, "Because it doesn't get you there any faster." That's how marketing works when your customer (even one as rich as Bill Gates) can evaluate your brand through the bias of price. A commercial airplane exists in the mind of Bill Gates to go from A to B. In Bill's mind what goes on inside the plane matters less than what goes on inside the engines. That's Bill's bias when it comes to commercial air travel.
It is possible to change the bias of a story. It does not exist equally in all of us.
In May of 1985 a commercial entitled, Jordan Flight, wrapped the Michael Jordan story around our mind and feet. The ten year result was an increase in Nike sales from 18 percent of the sneaker market to 43 percent. Also, the price of sneakers went to triple digits. But that COULD NOT matter because a Michael Jordan sneaker existed in the mind of customers not on their feet. What went on in the minds of these customers mattered more than what went on inside their sneakers. Be like Mike - no problem just pony up $200 bucks.
In 2006 New York Knicks superstar Stephon (Starbury) Marbury introduced the Starbury line of sneaker. They cost nowhere near triple digits, in fact at $14.98 they're barely priced in the double digits. Here is the story Stephon tells about the relationship between the cost of sneakers and basketball.
"The shoe(s) ain't going to make you jump higher. It's definitely not going to make you run faster. It does nothing but say you got $150 pair of shoes on, that's it."Stephon proves it by wearing his shoes when he plays. Stephon's story works. Starburys sell as fast as they show up on store shelves.
I've spent a lot of time in meetings arguing the evocative qualities of price. Here's the bottom line. Price only gets to play when the stories are equal.
Will Starburys win the sneaker race? You bet! After all, in their customers mind they only have to tie.
Technorati tags: Customer DNA, price, Stephon Marbury.