We are starting a process to get some additional capital into the company, apart from operations and profit generation. That is going well.
One of the aspects of this are discussions with people over our strategy and other elements of the business.
Some of these conversations are amusing. Some are annoying. Few are really helpful or insightful. That is, a great deal of time and effort is expended, with little return back for expending the time and effort.
Yeah the cost-benefit analysis isn’t well balanced here.
So part of the conversations turn to sales process, pricing, … . And this is where things get interesting, and often demonstrate the clear lack of sales and marketing experience of those giving you advice.
Suppose there are two products, A and B. Product A is from BigNameManufacturer. Everyone know them. Product A isn’t that good, it is more of a placeholder than product B. Product B is good, and is from a small company. Call it X. X is not a well known company, and B isn’t as well known as A. But B is much better than A. Far better.
You are a sales person. You work for X. You have to sell B in competition with A from BigNameManufacturer. You may be a marketing person helping to set the pricing for B.
You know B is better than A. Your customers know B is better than A. Some of them happily tell you, and tell the world.
Since B is better than A, should its price be higher?
This is a question that, well, people without operational experience, whom have never participated in a real marketing or sales team of a product, in a similar scenario … who usually have nice MBAs from various schools … this is the question they get completely wrong.
This is in part, because they don’t understand what it takes to sell a product, to get mind share, to get market share, to beat an entrenched competitor.
You have to set all aspects of the product so that the decision obvious. You have to make it so no other decision is possible, unless the decision maker is not acting in a rational manner.
Quantify better. Is better worth a positive price delta? Will that guarantee a sale?
Its that last part that the people without operational experience … thats the part they don’t get.
Better doesn’t guarantee you can charge more. Its one of several factors in getting to the decision for the customer. Price is another.
I won’t get into the context of this conversation more.
I just wonder why such people are offering this sort of advice, never having experienced what it takes to sell something.
Sort of like an ‘internet consultant’ who doesn’t own or know how to operate a computer. Yeah there are such things.