Lessons

Lesson Info

Position Your Product

This is about positioning your product positioning is one of my babies this is one of the things I love to talk about most of all in fact, we did a whole thirty day boot camp here at creative live on positioning called build a standout business, so if you want to learn more about that that class that hole boot camp is a fantastic way to do it, we're going to dio we're going to do it quick and dirty today, so price tells a story if you remember two things about this class it's the price is not a function of cost and that price tells a story when you think to yourself right now what's the story that your prices are currently telling what's the story that your prices are currently telling no, let me use an off out of industry example to make this point that's a cup of coffee my daughter thought it was ice cream when she first saw and she's like I don't think you'd like that, but let's talk about coffee consider how much you expect to pay for a cup of coffee? Well, it's specs is a really i...

nteresting word here because if you walk into so I'm from central pennsylvania and we have these stores called wass wah wah is amazing wow wow is a gas station where you can also get made to order coffee brewed coffee, huggies everything walla is my everything on on. I can't believe that the greater portland area doesn't have something similar, but anyhow, if you walk into a wall on what do you expect to pay for a cup of coffee? Sixty nine cents or ninety nine cents? Maybe I don't know when the last time it was actually about a cup of coffee from y la, but still you walk into a gas station, you expect to pay anywhere between sixty nine in ninety nine cents of kasey for coffee if they charged three dollars for a cup of brewed coffee, you'd think they were nuts that's because what was position in the market? A gas stations position in the market is at that extreme low end. The purchase, the purpose of them selling coffee is to basically provide you an intravenous drip of caffeine that's the purpose or not going there to meet people, you're not going there to try the latest ethiopian surprise coffee bean, right? You're going there for your caffeine fix given to mia's. Biggest possible right that's. Why it cost sixty nine cents. Now, if you walk down the street and you go to blue bottle here in san francisco, what do you expect to pay for drip coffee, you might pay up to seven dollars. For to rip coffee I'm not talking a lot today there's no milk involved it's delicious. Just go with it. When I was here two years ago to kick off the crafted maker channel, my boyfriend was with me and he went to blue bottle and paid seven dollars for a cup of coffee and I use that example ben and I always use that example now, but he enjoyed every last drop of it. It was an amazing location. He the people watching was fantastic. It was sort of, you know, it was a rich it was ritualistically presented to him and he consumed it ritualistically I mean, the's air the things that make it extremely valuable. So when you walk into blue bottle, you expect to pay five, six, seven dollars for a cup of coffee, not even sixty four ounces. I mean, like, eight ounces of coffee. Okay, those expectations where you're at, who you're with, what this product means to you, what are all the stories that go along with it that's positioning and it greatly changes our expectation of price. Think about when you go into the uh, you know, the local neighborhood artisan jeweler on your main street if you saw ah gold colored ring with a clear stone in it for two hundred dollars, what would you think that it's really valuable I would actually say the opposite what is wrong with this thing? Because if it's a gold colored ring with a clear stone in it at your artists and jeweler, you're going to expect that it's a diamond engagement ring made with fourteen or eighteen karat gold and that really should cost eight, twelve, fifteen thousand dollars, right? But if you walked into a target and you saw a gold colored ring with a clear stone, it was mark two hundred dollars. What would you think? Dear god, what have they put into this rain to make it so expensive? Because what you assume is that it's an alloy with some plastic stone in it that should cost fifteen dollars. So all of those stories, all of the detail that goes into where we are, who were with whether products means to us greatly affects the way a particular price tag hits us. And if the if the experience doesn't match the price tag, you get uncomfortable as a buyer, think about how often you might be making your customers uncomfortable with your prices. Let me tell you something uncomfortable customers don't buy a window shop they click around, they might ask you about the product, but they don't buy that's really, really important a huge part of the function of the price of what you make has to be telling the right story about what? What it is that you're doing now there's a lot of other details that go into that as well. We're going to talk about that in a little bit but that's hugely important. Okay, I got a little ahead of myself. What kind of experience to expect from a place that sells ninety sixty nine cent coffee? Not much, not much of an experience. What kind of experience do you expect from a place that sells coffee for six dollars? You expect that ritual you expect? Ah, fantastic atmosphere you expect handmade furniture you expect really knowledgeable baristas? What kind of business do you want to have? It is ok to have a business that positions itself intentionally at the low end of the market. Absolutely okay, I talk a lot about raising your prices. I talk a lot about moving towards the high end. I want to say right now it is ok to have a product at the lower end of the market if it's intentional if the pricing works. If you're telling a story that makes sense with that kind of product, do you want to have the kind of product that everyone can afford? By all means do it but make sure it works make sure every piece of it works for most of you though making it work is going to move me and moving towards the higher end all right we're all right so what story do you want to tell about your brand and this is another tweet me opportunity go on the twitters and ah ha hashtag us craft week twenty fifteen hit me up at terry gentilly and tell me what story do you want to tell about your brand? What is the story you want to be telling about your brand leslie I'm gonna call on you my name is wesley I make unique jewelry and leather products um my company is called head fountain you could find me instagram, facebook so I think I want to make something that's someone will use every day you know something that, um is unique also so like if if they put on a piece of my jury you know they'll get like, you know, a smile or where did you get that from that they put you know, if they pull out the leather wallet that I make they say oh that's cool little you know, a little gadget that you have inside the wallet that you know helps you carry other things. So just saying that it's something unique and maybe that other people want to buy also yeah, and I love that you said every day as well I think that that's a really clear positioning statement aa lot of times the things we spent super lots of money on we tend to not use every day or we have special considerations for them so every day is a great way to position your product and then unique is absolutely as well someone else. What kind of story do you want to tell about your brand? Yes, I am moline johann um I'm a cruciate er and I mean grew me ah, you can find me on instruct instagram, facebook our kathy a crafty pitchy bunny okay, so I do crow she a baby ah to to set so it's two to ah shoes and then sometime have been our whatever other accessories and I won ah my customer to feel special especially for like aa lot off the trans is like doing a first month photo shoots maybe like for first thirty and then ah, I want to make them for special and ah, I wantto really show my work that it's really because I'm really perfection is and very high details and it's different than other like in the target are in other departments are so I will I really want to make them really ah special but the first man worries that they have awesome so I'm hearing impeccable craftsmanship is part of your story making your customer feels are the customer yes making them feel special and what I'm also hearing too is that you want these things to be used for special moments as well and I think that adds a whole nother let level great fantastic thank you guys for sharing so another part of this is what brands do you want to be mentioned with? What brands do you want to be mentioned with the people, the brand, the designers, the products that our product has mentioned alongside of says a lot a lot about who we are now something that the wall off forever folks might be interested our might might understand is that walla is always mentioned alongside sheets on the eastern side of pennsylvania there's wall on the western side of pennsylvania they're sheath I grew up where the twain shall meet so she is like identical except it's not s o this's an important lesson for all of you but those those two brands and pennsylvania are basically synonymous. They do certain things differently, but they're basically the same thing they're gas stations the cell made to order sandwiches and coffee that's what they dio if you say sheets someone growing up on the eastern side of the state thinks while you say while someone growing up on the western side of state thinks sheets it's that simple it's a connection that we make to better understand the britons that we use the businesses that we consume okay, so what brands do you want to be mentioned with? These could be direct competitors or they could be in direct competitors so you know wesley, you might not want to be not necessarily be mentioned alongside other men's accessory makers but you might love getting mention alongside a men's shoe designer for men's jean designer or men's hat designer makes sense yeah and so if you can think alongside what air those complimentary brands that I want my brand to be associated with, you start to see really where your market isthe who were the other people that are buying those brands? What prices do they expect to pay? What experience do they expect to have and then you can reproduce that so that yours so that your putting out into the world those same details you're tipping them off to that same story? So what brands do you want to be mentioned with anitra? Um there's, a upscale carpet designer in brooklyn called moline b carpet she's a textile designer and she also moved into carpets and there insanely beautiful, colorful and vibrant which speaks to what I like to do yeah, I'm sure speaks to your same customer as well, right? And just to kind of come back to where we were before do your old your current prices line up better with her brand or do your soon to be new prices lined up better with her brand new? Yeah yeah exactly and what do you think those old prices might be telling people right now that I'm playing it safe yeah, where that there's something wrong with your product that it's not as good as this other designer that you love and maybe that they love as well. Awesome that that is that is it in a nutshell, that's what happens? You can start to better understand your customer, you can start to better understand what they expect you can better you can start to better understand how they're going to say see the price tag that you're currently putting on your products. So to figure this out, we do what's called a competitive analysis and I just broke this down really simply in your work buck it's on so I didn't page number sport, so I don't have a page number for you, but the top says competitive analysis and this is just a simple four column thing. You could go way more into that if you wanted tio, but first I want to introduce you tio, a friend of mine, her name's megan eckmann she runs a brand called studio and e confined her its studio and e dot com. Now she does fine art, she does illustrations, but the line that is really humming for her is her kind of gift line and that's that's the studio enemy brand and this is a particular representation of one of those things she makes embroidery kits from her illustrations. Now kits are a huge market right now. She actually sells these embroidery kits on mod cloth on does very well with that. She also sells them a craft fair, sells them wholesale, other places on sells them retail on her website as well. But these kits that's kind of her market. So when I was thinking about her competitive analysis, I started thinking about first, about direct competitors who else is making embroidery kids? Because I want to know how much they're charging and what kind of experience they're creating for their customers. Then I started thinking about in direct competitors who else is just making d I y kits? Because most of the time, the choice your customers are making is not between one one embroidery kit and another embroidery kit. They're making a choice between an embroidery kit and a jewelry making kit, right? And so you want to make sure that you're factoring that in a swell so here's what it looks like first of all, the first competitors is target through their handmade mark modern brand. They have an embroidery kit that sells for nine, ninety nine. What is it? What are some of the things they tell me the story? What are some of the details, the supporting evidence that kind of support that price or that price range it's, a discount retailer, of course, but it's also a hip brand, and so maybe this isn't the bargain basement of embroidery kits. Maybe this is a little bit more than that, but still discount there's also sublime stitching that's been around for a long time. They do kind of really cool retro tattoo inspired embroidery. They still anywhere from five to thirty dollars. Now that five dollars is for a digital pattern, thirty dollars is for the full kit. If the blind stitching worked directly with artists kind of similar to megan's brand in which she's the artist creating the patterns sublime stitching, does licensing on dh they've got this, like I said, kind of cool hipster branding they sell e commerce, amazon boutiques so really similar toe what megan's doing so let's keep that price in mind. Um brit dot co sells a lot of d I y tutorials and kits as well. They're pricing their things anywhere between thirty five and seventy five dollars. They were on a huge blogged have a hip brand. They are online only. And then, of course, mod cloth where I said meghan actually sells. She is the low end of this price range show she's currently selling her kids. Between twenty one and twenty five dollars mod cloth has other kinds of kits that go up to thirty seven dollars now when I e mailed meghan and I said, hey make and I know it's last minute but I'd really like to use your brand is an example for this is that okay? She said sure and feel free to tell people I'm raising my price is five dollars and I said, well megan, that is a fantastic example because when I did your competitive analysis I immediately thought you should be closer to atleast the middle if not the higher side of this price range she said corinne I'm so glad to be on the right track of course she is on the right track she learned from the best anyhow um so this is what goes into aa competitive analysis want think in direct competitors and you want to think direct competitors remember the disc decision that your customers is ever making about your product and about the price that you're charging for it is often not you know, between two different kinds of apples a gala and honey crisp right it's between an apple and an orange so actually the work the oranges into your competitive analysis your homework is to complete that competitive analysis I really want you to think about all the different types of brands the different types of products that are out there that rep fully represent the market that you want to be selling it. Because we're going to take that. And use that in the in the breast of the lessons for how you're going to create your values story. How you're going to decide on that final pricing strategy.