As I was saying yesterday, pricing is an important marketing tool. Price-cutting, if not handled carefully, can seriously affect our customers’ concept of the value of our products.
Take theatre tickets. A £50 price tag tells our audience that this is a large scale West End musical. £20 says it’s a mid-scale play in a local venue. The price doesn’t guarantee that you’ll like the show but it indicates the production values. There is no point in selling a top West End musical at less than £50 because customers will think it must have cheap sets and three people in the chorus.
So, when the National Theatre sells seats for £10 that would normally cost £35 or more, potentially this undermines theatre audiences’ expectations. Not about the NT of course, because their audience know their reputation and that they have a subsidy, both of which guarantee something more substantial than the typical small-scale arts centre product normally available at that price. The problem is that people who have heard about the £10 tickets may no longer be sure whether they are being ripped off by the usual price at other theatres or whether other low priced tickets might also actually be high value productions.
The NT have a sponsorship deal which can be used to explain the low price without undermining the value of the tickets but they made too little of this and too much of the way £10 tickets would fill empty seats, implying those seats were currently overpriced.
Sunday, December 31, 2006
Saturday, December 30, 2006
The Price of Marketing
What was that DVD you were given for Christmas worth? Did your relative love you enough to pay £15 for it or did they shop around because they only wanted to spend a fiver on you? Zoe Williams said in The Guardian that pre-Christmas sales and the internet were destroying our sense of what gifts are worth. In a similar vein, the editor of Music Week recently bemoaned the way Tesco had been selling Lily Allen’s CD for a fiver earlier in the autumn, saying it undermined the value of CDs.
Now you may feel that it’s all to the good that the cost of over-priced products is forced down. The problem is, price has always been an important part of marketing and if our customers cannot get an indication of the quality from the price, we have lost a useful marketing tool.
Discount offers are useful but they work best when they can be judged against a standard price and when there is a clear reason for them. That’s why an end-of-season clearance works so well.
My experience is that price-cutting may boost sales short-term but customers soon adjust their expectation to the lower price and then further discounts are needed to gain sales. Compare the way jars of instant coffee keep dropping in price and sales keep falling too, while the cost of a latte at your favourite coffee house, despite the competition, goes up and up.
Unique, or at least specialist, products will continue to command a premium price. The victims of price wars are the products in the middle that are neither top sellers nor in a niche market. These will suffer most if they are made to seem overpriced by continuous Sales and pile-them-high-sell-them-cheap supermarkets.
Now you may feel that it’s all to the good that the cost of over-priced products is forced down. The problem is, price has always been an important part of marketing and if our customers cannot get an indication of the quality from the price, we have lost a useful marketing tool.
Discount offers are useful but they work best when they can be judged against a standard price and when there is a clear reason for them. That’s why an end-of-season clearance works so well.
My experience is that price-cutting may boost sales short-term but customers soon adjust their expectation to the lower price and then further discounts are needed to gain sales. Compare the way jars of instant coffee keep dropping in price and sales keep falling too, while the cost of a latte at your favourite coffee house, despite the competition, goes up and up.
Unique, or at least specialist, products will continue to command a premium price. The victims of price wars are the products in the middle that are neither top sellers nor in a niche market. These will suffer most if they are made to seem overpriced by continuous Sales and pile-them-high-sell-them-cheap supermarkets.
Friday, December 29, 2006
Customer Service or Bribe?
If you get poor customer service and the business gives you a voucher or some other monetary compensation, does it then become good customer service or just a bribe?
I say 'bribe' unless the business makes clear that they understand what made the service poor, gives you a genuine apology and tells you how they’re going to improve in future.
I say 'bribe' unless the business makes clear that they understand what made the service poor, gives you a genuine apology and tells you how they’re going to improve in future.
Monday, December 25, 2006
Farewell Ricky
Sorry about the gap in my blogging. Someone very close to us died recently of cancer at the ridiculously young age of 49 and it has left us all in a state of shock.
Ricky Knott was a remarkable man for what should be unremarkable qualities but aren’t. He was the sort of person interested in others first and himself a long second. Someone who asked after your health, even when he was the one dying. A person with a ready smile for all he met. Someone always fascinated by life and always positive in his approach to it. He was the sort who walks in to a room and says ‘There you are’ rather than ‘Here I am’. As I say, qualities that should be commonplace but are so rare that he was the most popular person I knew, and every one of the 30 odd people who have so far left memories on his memorial website http://richardknott.info has commented on them. He wasn't a marketing man but we can all learn a lot from him.
Ricky leaves a widow and three lovely daughters who are a tribute to him. The gap in the lives of those who knew him cannot be filled.
Ricky Knott was a remarkable man for what should be unremarkable qualities but aren’t. He was the sort of person interested in others first and himself a long second. Someone who asked after your health, even when he was the one dying. A person with a ready smile for all he met. Someone always fascinated by life and always positive in his approach to it. He was the sort who walks in to a room and says ‘There you are’ rather than ‘Here I am’. As I say, qualities that should be commonplace but are so rare that he was the most popular person I knew, and every one of the 30 odd people who have so far left memories on his memorial website http://richardknott.info has commented on them. He wasn't a marketing man but we can all learn a lot from him.
Ricky leaves a widow and three lovely daughters who are a tribute to him. The gap in the lives of those who knew him cannot be filled.
Monday, December 11, 2006
Getting Text Marketing Right
Karen Fricker asks in To Text Or Not To Text on the Guardian’s website
whether using text messages to market theatre performances is a good idea.
I think it's an excellent idea, with the following provisos. The recipients must give their permission (which is a legal requirement), the marketers must make it easy for them to stop receiving the texts and thecommunications must be of genuine use to them. The last point is probably the most important. As with mail, it is only junk or spam if you’re not interested. If the texts are targeted to people according to their previously declared interests (new productions going on sale, late offers, particular genres, etc), then there should not be a problem.
Well, there might be one problem- the marketer must not abuse the fact of being given permission to text by bombarding the recipient. An online CD retailer fell foul of this a little while ago. At first, they found that the more frequently they emailed their list of people who had asked to receive news, the more CDs they sold, until they were emailing once a week and doing very nicely. But they carried on increasing the frequency, eventually sending a daily email, and suddenly their business collapsed. Their customers simply got annoyed and voted with their feet.
The optimum number of emails seems to be no more than once a week and I suspect that the same applies to texts. I propose that, when someone subscribes to receive texts, they are not only asked what they are interested in but also the maximum number of texts they want to receive in a month.
whether using text messages to market theatre performances is a good idea.
I think it's an excellent idea, with the following provisos. The recipients must give their permission (which is a legal requirement), the marketers must make it easy for them to stop receiving the texts and thecommunications must be of genuine use to them. The last point is probably the most important. As with mail, it is only junk or spam if you’re not interested. If the texts are targeted to people according to their previously declared interests (new productions going on sale, late offers, particular genres, etc), then there should not be a problem.
Well, there might be one problem- the marketer must not abuse the fact of being given permission to text by bombarding the recipient. An online CD retailer fell foul of this a little while ago. At first, they found that the more frequently they emailed their list of people who had asked to receive news, the more CDs they sold, until they were emailing once a week and doing very nicely. But they carried on increasing the frequency, eventually sending a daily email, and suddenly their business collapsed. Their customers simply got annoyed and voted with their feet.
The optimum number of emails seems to be no more than once a week and I suspect that the same applies to texts. I propose that, when someone subscribes to receive texts, they are not only asked what they are interested in but also the maximum number of texts they want to receive in a month.
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