Sometimes learning comes in ways that you least expect it. When my family gave me a special birthday present some time ago, I did not expect it to come with a BFO – Blinding Flash of the Obvious!
Here’s the story: Back in January, my family gifted me The NASCAR EXPERIENCE. A once-in-a-lifetime opportunity to drive a real NASCAR machine on a real NASCAR track! Every guy’s dream – to go as fast as you can without having to look in the rear-view mirror worried about red-flashing lights!
But, as life goes, I put it off and put it off until finally I dusted off the gift card, picked up the phone and made a reservation for September 18 at Texas Motor Speedway. If you’ve not been to the speedway, let me just say it is massive, loud and totally awesome!
Upon arriving I signed in, was issued a driving suit (the real deal), along with earpieces and a transponder. I waited and watched as others took their turns in the car, by themselves, experiencing the thrill of a lifetime. Then my transponder went off and 40 anxious customers were whisked away into a classroom where we were given an hour-long briefing on what to expect, what to do, what to watch for and how to have a fast but safe experience.
As a footnote, there were probably 15 people in the class who had never driven a stick shift vehicle! Imagine that your very first time driving with a manual transmission is when you are about to go as fast as you can in a race car – crazy! But these instructors were professionals and they “guaranteed” the wanna-be drivers that they would teach them how to get out of the pit and onto the track.
Shortly after the class, we were “suited up”, fitted with helmets, tested for sound and positioned to get into a racing machine. The pit crew chief sized up each driver and selected the right car for them. One at a time, we had our 5-8 minutes of glory on the big track. The sound was loud and powerful, the smell was clearly of grease, oil, fuel and fresh rubber. It WAS the complete experience.
I got the car I was hoping to drive – the M&M car – loud, colourful and fast! I had 8 minutes to go as fast and as far as I could. (They did governor the engines to 5000 rpm). I rumbled out of pit row, quickly got up to speed and held on tight for the first turn. I was instructed to take my speed up to 4500 rpm coming down the front stretch, then once my spotter saw that I was in control, he instructed me to open it up and keep my foot on the gas! I ran right at the 5000 rpm limit and raced around the track for 5 or 6 of the fastest laps I have ever experienced. Top speed: 155.42!
So, you must be asking, what does all this have to do with my lesson? Here it is:
People often spend money and buy things” or “stuff” without consideration for price – why is that? It is because the product or service there are buying offers something much more than just a competitive price. The business has positioned their product or service to live well UP the price continuum – far from the bottom where price alone matters in making a buying decision.
If you’re not familiar with the Price Continuum, you must know and understand it.How you position your products and services matter – particularly if you do not want to compete on price alone.
Here’s the Price Continuum:
At the bottom is PRICE. This is where products or services are sold as a commodity. Nothing differentiates them from their competition. It is price alone that determines whether a customer buys product A or product B.
The next step up is a PACKAGE. This is where a product is bundled with a service in an attempt to disguise price. This allows for some differentiation in that the packaged product/service can be unique from the competition. Packaging or bundling is a way to get more than just rock bottom price for what you have to offer.
The third step up the continuum is where there is an EXPERIENCE. What the customer is buying is something more than just the product or service but the “experience” or “feelings” that are unique to how you deliver your product or service. This requires some thoughtful planning and deliberate customer interactions, but can separate your product or service from the “me to” crowd that is selling only based on price.
Higher yet on the continuum is where there is a TRANSFORMATION. This s where the product or service you are selling actually “changes” something when it gets used. It could be a physical change or a mental change, but something happens as a result of using your product of service. In these situations, a customer who desires that particular change is not focused on price, but on getting the desired transformation.
The top rung on the price continuum is where there is a GUARANTEED TRANSFORMATION OR EXPERIENCE. The furthest point from price is where you GUARANTEE that you will have an experience or have a transformation as a result of buying a particular product or service. One that comes to mind as an example is going to Disneyland or Disneyworld. They have designed their business to deliver a “guaranteed experience” of visiting a make believe world where Mickey Mouse and other characters actually live! It is why people who could pay $60 to go to the local amusement park would instead pay thousands of dollars to fly their entire family across the country to “experience” a make-believe world!
My NASCAR EXPERIENCE was not a purchase made on the basis of price. It was made on the basis of a “guaranteed experience”. As a result, I was willing to pay whatever it cost to have that experience. They were “selling” well up the price continuum.
How about you? Where is your product of service positioned? Are you struggling trying to compete on price alone. Shaving your margins to make ends meet? Why not step up the Price Continuum?
Don’t know how? Don’t think it can be done in your industry? Let me assure you, it CAN be done in every industry!
If you’d like to begin positioning your products and services higher on the price continuum, drop me a note and we’ll find time to get together. Trust me – you’ll be glad you did!