Many businesses think they’re in competition with another business of the same nature.
I began experiencing this when I started marketing a few training courses by LEAD.
Take, for example, a data science course. You’re a marketer who wants to sell this course. Typically, you’d scan the market for competitors who are also providing data science courses and observe how much they charge. Then strategize how much to price your course and look at ways to improve its value.
This is what most would do. It isn’t wrong.
But I started to realize when promoting a RM2899 data science course, is that our competitors were not only the other training providers. Our competitors were also travelling companies, Apple, Samsung, cars and more.
The Spending ‘Bucket’ of Most People
Everyone, if not most, has a spending ‘bucket’ that they set aside each month. Say you have RM3000 in that bucket. What are you going to spend on this month?
- Buy a new phone?
- Take that money and go for a holiday?
- Or maybe re-invest that money? (I’m currently investing in P2P Financing through Funding Societies and loving it.)
- Buy a data science course at RM2899
So as someone trying to sell a course, I’m not only competing with other course providers. I’m trying to increase the value of my product so that the potential client would skip his holiday and choose to go for the course.
Increasing the value of the product
When an individual buys a product, say at RM2899. His ‘perceived value’ of the product is actually higher than RM2899. Nobody buys something at RM2899 and perceives the product/service to be just RM2899.
I buy a smartphone at RM3000 because I perceive the value it brings me; the entertainment I get with it, the camera, the calls I get to make – to be more than RM3000.
People pay for a RM8000 holiday because the value of the experience, supersede that amount that they are willing to part with.
And people buy a course at RM2899, because they believe themselves, to be able to achieve & do more after that. With their newly found skills, rapidly expand their business or get hired by a corporation. The value they get from the course is way higher than RM2899.
Where an individual chooses to spend his spending bucket, depends on the value he’s willing to exchange it for.
So the question we should ponder is, how do we increase the value of our product or service, so much – over exceeding anything a potential client is considering, so that he, would choose to spend his bucket on our product.