I walked up to a man at the flea market and I looked at his table. I noticed an old windup monkey with symbols that I thought my son would like. I held it up and saw the price tag of $18. I was surprised he valued it so high.
I wanted to walk away with it for only $5.
So I began to ask him about it. How old was it? Where did he get it? The more he questions he answered the more I realized how much he valued it. There was a slim chance I would get it for $5, $7 at the most, but I would at least try.
I offered him $5 and he smiled. That’s way to low, he said.
I could do $6.
I could do $15, he said.
The most I could do is $7.
The best I could do is $12, he said.
I can’t go that high and I said thanks for your time and walked away.
I think most people would have gone up to $10, but it wasn’t worth it to me. The value just wasn’t there.
When you are pricing for your customers it’s important to understand what is valuable to them. Their time, money
Kirk Bowman and I talk about pricing, value, and why charging per hour is a bad choice if you are in the service based industry.
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You can learn more about Kirk Bowman at Art of Value. You can also find him on Twitter here.
Do you have any questions about pricing and how it affects your conversion?