Our Play-at-Home members are also tasked with finding their best three questions about each week’s topic. And since there’s no way we’d ever get to all of them during a live episode, I’m answering ‘em here. Did I miss one of yours? Please leave it in the comments and below and either Nick or myself will get to it lickety-split.
How do you put together a focus group to review new products?
Great question! Actually, the best time to hold a focus group is in the information-gathering or pre-design phase of product development. If you wait until after you’ve created your product to gather this kind of feedback, the data you gather may end up negating all the hard work you’ve already done. (I’ve got some focus group tips for you on TheWordChef.com.)
That doesn’t mean you shouldn’t test your products. You should! It just means, that ideally you’ll want to do this with potential customers one at time — either at their own location or yours — so that comments from other folks in the room don’t interfere with their thoughts and responses.
There are exceptions, of course. If you’ve created a new class for example, you would hold that class as planned, and then ask each attendee to fill out a survey afterward so you can get individual feedback. Actually, if you’re doing any sort of teaching or group work, this is something you should always do as part of a continual improvement process.
If you make items to sell, how can you price appropriately in a competitive market?
There’s no easy answer or one-size-fits all formula for pricing. You’ll have to weigh several factors and then test them to find the right pricing for you. Start first with your costs and then take a look at the market. Try to find the middle ground as a starting point — not the highest price and not the lowest price. Then see if people buy it. If they snatch it up without hesitation, you may have priced it too low. Bump up the price slightly until you find enough resistance that you can serve your right people in the right time at a level that works for you. If people aren’t buying, it may be that you’ve priced your item too high. Test that theory by bumping down slightly. But be careful! You don’t want to go all the way to the bottom and lose your profit margin.
What are effective strategies for reaching out to clients when product/service is not a repeat business?
If you’re only ever going after new customers, you’re going to find your road a little harder. Each new client requires a process of: 1) Knowing that you even exist; 2) Liking what you have to offer and feeling compatible with it; and 3) Trusting that you’re the right person to deliver the goods. Depending on your price point, that process can take a long time (it can feel like forever!). The best things to do in this case are still the best things every business should do (whether they work off repeat business or not):
- Know who your Ideal Client is, what they need and desire, their worldview and where to find them.
- Know you YOU are and how your best thing meets their needs and desires.
- Go to the places where they already hang out and begin to build relationships by being genuine and helpful (NOT selly-sell).
- Make offers when the time is right.
- Continue to nurture relationships.
- Make a sale when the time is right (for the customer).
- Fulfill your promises.
- Gather feedback and improve on your offering.
- Rinse, repeat.
I know that many of my clients, and potential clients, have very limited budgets and I would therefore like to offer high-quality products at low prices — meaning that they’re accessible for as many people as possible. Is it really always the case that low-priced products are perceived as low quality?
In many cases, yes. But price is relative. What might be high to one person, could be very low to another. The thing that’s important is that the customer sees the value and is putting in enough “skin” to validate that for themselves. That could mean that instead of money, a customer is required to pay in time. Just be sure that your pricing fits into a realistic financial plan for your business. If you aren’t getting paid enough by your customers, you’ll need to find other revenue sources (like sponsors) to help make up the difference. And unless you have the worldwide reach of Walmart, you’ll probably never sell enough low-priced items to make a reasonable living.
What’s your take on the ‘pay what you can’ model for products? Is it still profitable? Is it best to try as a window of time (special ‘sale’) or will it work as your actual 24/7 price strategy?
I’ve tried the Pay-what-you-can model (for services) and find that mostly it attracts folks who aren’t all that serious about what is offered. It’s been true even for me, as a customer! Unfortunately, there needs to be a real investment by the customer — in either their time or their money — for them to feel that your thing is worthwhile enough to follow through. Now, if you just want to collect money and not actually serve clients who want to change, then the pay-what-you-can might help you skim a few more dollars off the edges of your target market. But long-term it’s not the best approach. Special sales should also be done with care as they can devalue your offering in the mind of your prospect. (They end up thinking that your sale price is the true/real value.) Better to add a free gift as an incentive to buy, than to offer a discount. It just trains people to wait for the sale.
When do you know it’s the right time to create a product? I always like to keep my energy focused so curious your perspective on when to bring on another offering.
The time is right when…
- What you’re doing is already humming along quite nicely and you feel good about your processes and systems.
- Your existing clients have been asking you for something specific (over and over and over again).
- You have the time and resources (money and/or people) to tackle something new.
New offerings are always a bit of a risk because putting them together and marketing them takes time and energy away from what you’re already doing. But new offerings can also inject some new life into your business. The trick is finding the right balance — and that’s really part of the fun of building a business.