This Is Marketing: You Cant Be Seen Until You Learn to See

 CHAPTER SIXTEEN 
Price Is a Story
Pricing is a marketing tool, not simply a way to get money
Eventually, you’re going to have to tell people how much you’re charging
for your services and products. There are two key things to keep in mind
about pricing:
Marketing changes your pricing.
Pricing changes your marketing.
Because people form assumptions and associations based on your
pricing, and your pricing shapes what people believe about your service, it’s
important to be clear about how you position yourself. Your price should be
aligned with the extremes you claimed as part of your positioning.
Are you the kind of person who buys the cheapest wine on the menu?
What about the most expensive?
Notice that neither question said anything about the wine itself. Not
about its taste or its value.
Simply the price.
No one drives the cheapest possible car (you hardly ever see a used Yugo
going down the street) and few are foolish enough to drive a Bugatti around
town. But within those extremes, countless stories are being told. Stories we
tell ourselves and stories we tell those around us.
A Porsche Cayenne has no conceivable utility proportionate to its
expense. It’s merely a signal, a silver or red painted flag we fly high in our
driveway and in the theater of our self-esteem.
Of course, the price is more than a signal. It’s also the engine for our
project’s growth, because price determines what we stand for, who we’re
designing for, and the story we tell. And price creates (or eliminates)

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margin, and that margin is the money that’s available to spend on our
outbound marketing.
Consider the baker. If the ingredients and overhead associated with a loaf
of bread cost $1.95 a loaf at a reasonable quantity, we can examine three
extremes:
At a retail price of two dollars a loaf, the profit per loaf is a nickel.
At a price of $2.50 a loaf, the profit per loaf is fifty-five cents. That’s an
eleven-fold increase, more than 1,000 percent more profit per loaf.
And at three dollars a loaf, we’re making more than a dollar a loaf, more
than twenty times what we made in the first example.
The baker who charges two dollars a loaf has to sell twenty-one loaves
for every loaf the luxury baker sells at three dollars. Twenty-one times as
many is the difference between a few customers an hour or a line out the
door.
“But,” we say, “our customers would prefer to pay the lower price.”
Perhaps. But how do they value the sparkling clean shop, with plenty of
well-paid and helpful staff, a new sign in the window, and a local baseball
team with new jerseys with your logo on them? How do they value the
handsome shopping bag that comes with every loaf, not to mention the free
samples of the little butter cookies you call punitions? How does it make
them feel to tell their friends that they’re eating the same bread that’s served
at the fancy restaurant down the street?
Better to apologize for the price once than to have to excuse a hundred
small slights again and again.
Price is a signal.