Change-Up of Delivery and Content May Be Just the Pitch to Sell at a Higher Price Point
During a roundtable titled How to Market High-Priced Products at the SIPA 2010 Conference, Robin Crumby, managing director, Melcrum Publishing Ltd., presented a very interesting case study. Here was the challenge: How do you turn a 300 euro ($387) print-subscription newsletter with poor renewal rates into a 20,000 euro ($25.768) “Forum” membership service with renewal rates over 90%?
The plan hinges upon the fact that although you have to work much harder to sell at a higher price point, it is far worth it. Not only do you give yourself the potential to make more money, but you build a stronger relationship with the customers, increase their level of engagement, and increase the odds of retaining them.
The first thing done was a customer analysis. Here’s what customers were prepared to pay for: expert analysis, benchmarking, independent research, training/development, quality journalism and face-to-face networking. And here’s what they weren’t prepared to pay for: industry news, opinion pieces, discussion, online networking, user-generated content and job listings.
Next came the way they changed the delivery of the service. Out was print/PDF/html and in came Powerpoint and face-to-face. The content transformed from data (case studies/articles) to recommendations and advice. Frequency went from 10 times a year to unlimited requests. And the price rose from 300 euros to 20,000.
How they sold the new service also changed. With more money on the line, email and direct mail were replaced by face-to-face—plus they continued to call customers. A sample issue and a seven-day trial were supplanted by an executive summary and a guest pass to a member meeting.
Here is what Crumby said were the lessons learned:
1. Price objections: customers will tell you that they don’t have budget for a 300 euro newsletter that doesn’t quite meet their needs but will then spend 50 times this amount on a service that exactly meets their needs.
2. Get close to customer: there is no substitute for building close partnerships with key customers to better understand how you can serve them better.
3. Sales cycle is much longer: the higher the price, the longer the sales cycle. Often customers will need to wait for the next budgetary period before they can sign up.
4. Consultative sell: some telemarketers can make the cross-over to a more consultative sell, but often selling a high-priced service requires a different skill set altogether.
5. Payments are slow: getting customers to pay for big-ticket items can be painful (up to 180 days!)
6. Don’t tell them, show them: a face-to-face meeting or guest pass to a meeting works better than a list of bullet-points describing the service.
7. Competition: launching this service will mean competing with non-publishers, so research the market again.
Lastly, Crumby listed some good questions to ask customers to gain a better understanding of their broader needs and how you can support them?
1. What are you working on?
2. Where do you turn for help?
3. What are you business goals for this year?
4. How do you measure your team’s performance?
5. How do you train your team?
6. How big is your team?
7. Which of your competitors do you admire and why?
8. Why do you value your subscription/membership?
9. What else could we help you with?
All of this information came from just that one Roundtable session. The SIPA Marketing Conference in Miami will feature 15 of them, all filled with how-to information like this! Check out the action-packed agenda!
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