The “Street Price” Is All That Counts
Go to any bazaar or souk in the Middle East or Africa, go to a marketplace in Latin or South America, go to the famed “Silk Alley” in Beijing and you quickly learn the difference between the marked price and the “street” price. No one pays attention to the marked price. The starting point for discussion is the street price and the perception of value is based on the presumed street price.
So when I go to Silk Alley (which I try to avoid, but am sometimes dragged to) and see something “priced” at 1000 Yuan, my assessment of value is never based on “Is that worth 1000 Yuan?” Instead, what’s going on in my mind is, “The real price is going to be somewhere around 200 Yuan, maybe lower. Is it worth that much to me?”
The same thing happens in B2B sales. We live in a world of perpetual promotions, “buy now and we will give 15% off,” “buy now and we will add training worth…” The street price has become the norm, the baseline against which customers evaluate value.
Yet, we try to get too clever in our sales and marketing. We maintain a façade about the marked price and the value at that marked price, using promotions to “incent” customers, “buy now, and you get a better deal.” Even worse, we think the “deal” will get customers who have no need to buy to buy.
I see it every day. The seminar or workshop, “a special offer for left handed sales consultants who live in Southern California….,” a web based tool, “special promotions,” all trying to get me to think I’m getting such extra value. In my mind, the evaluation of the offer is the same as my evaluation of something in Silk Alley, “the price they want to get is this, do I get value from that price.”
If there isn’t a deal now, I’ll wait for the deal because I know there is always a deal–a street price. I’ll buy at the end of the month, the end of the quarter.
All the positioning, all the promotion is clutter and distraction. It demeans your value because I know you have a street price–the price that you really want, the price that for the majority of deals.
Buyers are sophisticated. Stop playing games. Believe in your pricing, believe in your value, stick to your guns. Make your street price the real price. Defend it, drive your value based on this, stop playing games. Your customers are already there, you might as well be there too.
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