The other day, I blogged my frustration at yet another millionaire mind marketing guru who promises the “secret formula” for success. In a nutshell, the author’sformula boils down to the following:
1. Get your message in front of more eyeballs
2. Get more money per eyeball
3. Sell more products to your existing customers on the back end
I’ve already ranted about the first step to wealth and riches which is, “Get your message in front of more eyeballs”.
Seems getting the message of a lousy business model with no appreciable benefit to the customer in front of as many eyeballs as possible is NOT the key to success.
Today, I’m digging into step 2, which admonishes you to get more money per eyeball.At face value, it appears this is sage advice. Increasing the effectiveness of your marketing is a WONDERFUL way to grow your business. Unfortunately, having read the promotional material for the book, step 2 is not geared towards increasing your % of sales but instead focuses on raising your price to get all you can. This is yet another popular “millionaire mindset” gimick.
If you want to make more money then just CHARGE MORE for your product. After all, by raising your price, you’ll merely be charging what your product or service is WORTH!
In other words, if you’re charging $100 per item or hour and you want to increase your profits, just raise the price to $150. People will continue buying at the higher price point and YOU will rake in even more money.
I have a problem with this mindset and it’s probably rooted in my days as a wage slave. Long ago and far away, I worked selling advertising for a big newspaper chain, and it was just this type of thinking made the advertising staff’s lives a living hell.
Understand that every ad that runs in the newspaper is measured by “inches”. The formula is width X depth. So an ad that is 6 columns wide and 6 inches deep is considered to be 36 inches. (The fact that each column is slightly more than 2″ wide doesn’t enter into the equation. A 6X6 ad is rectangular in shape, not square as you might think.)
As advertising sales reps, our sales goals were based on the number of inches we had sold the previous year, not the dollar amount of the sales we generated. The publisher (who is the CEO of the newspaper) had a very simple view of budgeting: If an ad in the paper was $10 per inch last year and you sold 40,000 inches last year, then if he raised the rate to $20 per inch then the paper’s revenues would double. Add in a nice 20% increase on last years number of inches sold and BINGO! There was the advertising revenue budget for the year. Our individual goals were set thanks to a nice easy formula.
The problem in his logic? My clients weren’t buying ads by the inch. As a matter of fact, the first question my clients would ask was “how big of an ad can I get for $300?” Clients set their advertising budgets by dollars not inches. No one was buying X number of inches in advertising!
When the rate doubled (as it did every year I was there), the ads clients ran just got smaller. Try as we might, over the years we were never were able to communicate to the publisher that his logic was flawed. The last I heard, he had bounced around several papers and at the last report he was at a tiny paper deep in the Midwest, probably still setting goals for his advertising department using his “simple” system.
On the other hand, one can look at America’s largest retailer and see that the key its success was and continues to be viewing the pricing model from the CONSUMER’S EYES. Sam Walton believed it was better to make 5 cents on the dollar and sell $500 worth of merchandise than to make 20 cents on the dollars and sell $100 worth of merchandise. Sam believed that consumers would buy MORE if they percieved they were getting a deal. The years have proven that Sam had the right idea.
Make less per sale but sell more.
Sam didn’t invent this theory by the way, Henry Ford had a similar approach earlier in the 20th Century.
It seem the best ideas aren’t “secret” but rather mundane. Then again, I guess the “Marketing Master’s Manual of the Mundane” wouldn’t be climbing the charts on Amazon’s top selling titles.