Saturday, June 26, 2010

More than Price

Wisdom from Seth Godin:

What's included?

This is the pricing question of our time.

First, from the buyer's point of view: when I buy this car/boiler/phone, how much are the services that come with it going to cost me every month, forever?

We stand at the Verizon store agonizing about the extra $34 in posted price for one phone over the other, then sign a contract for $2400 in fees.

We are attracted to a car with a rebate, not caring about the $2000 extra in lifetime gas costs.

More and more, the thing we buy isn't a thing, it's a subscription. The thing might as well be free.

And from the seller's point of view?

When you sell me that low-cost email service, did you also just get yourself on the hook for a lifetime of free support? What's that going to cost you?

When you take her reservation at your hotel, are you prepared to do all the work and attention you need to get a decent review on TripAdvisor? Ready for your CEO to take a call in the middle of the night, ready to comp meals, scramble teams of reps or engage in months of correspondence with that customer? Because that's all included in your marketing costs now, isn't it?

I recently hired someone to do some research and brainstorming. The first stage of what might become quite a bit of work. I was sort of amazed at the end of the short project... he asked me if I was happy with what I got, and I said, 'no.' He said, 'sorry' and walked away.

On one hand, this is dumb marketing, because he'd already done the hard work of establishing a customer, and wasn't particularly interested in turning that customer into a happy referral.

On the other hand, the old school decision to view a transaction as a transaction, time to move on to the next, is getting more and more rare. Perhaps it's an intentional act on his part, a way of doing business in the moment, without investing in or worrying about what comes as a result.

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