No B.S. Price Strategy: The Ultimate No Holds Barred, Kick Butt, Take No Prisoners Guide to Profits, Power, and Prosperity

248 Pages·2011·21.31 MB·English

by  Dan S. Kennedy

Glazer-Kennedy Insider's CircleM Trial Membership,
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Take CONTROL of your PROFITS
Millionaire maker Dan S. Kennedy and marketing strategist Jason Marrs dare you
to re-examine your every belief about pricing and empower you to take a more
creative, more effective, bold approach to your price-and prosperity.
Kennedy and Marrs don't offer little tricks, like new ways to say 50% off,
half off, or 2 for 1. They tell you the secret to setting prices for the greatest gain.
Then they teach you how to avoid the ultimate price and fee failures-like
attracting customers who buy by price. You'll discover how to compete with FREE,
learn how to discount without damage , and uncover the key to price elasticity
Most importantly, you'll grasp how to use price to your extreme advantage and
grant yourself the power to be as profitable as possible.
Reveals:
• The 9 ultimate price and fee failures
• The trick behind discounting without devaluing
• The 5 price-related propositions to be concerned with
• The million-dollar secret behind "FREE"
• How to win price wars with competitors
• Why price cutting isn't the cure for the recession and what is
••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
All I can say is wow. I had been having a difficult time accepting that we can justify
a slightly higher than usual price for our product until I read Chapter 7. The examples
and stories in No B.S. Price Strategy made what would typically be a dull read - fun and
interesting. Thanks for taking this useful information and making it enjoyable.
-Robin Strickland, Co-Founder, BiglittleFudge.com
ISBN 13: 978-1-59918-400-5
ISBN 10: 1-59918-400-1
B$1u7si.n9e5s s / Management / Ep
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© 2011 by Entrepreneur Press
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This publication is designed to provide accurate and authoritative infor-
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Library of Congress Cataloging-in-Publication Data
Kennedy, Dan S., 1954-
No B.5. price strategy Iby Dan Kennedy and Jason Marrs.
p. cm.
ISBN-lO: 1-59918-400-1 (alk. paper)
ISBN-13: 978-1-59918-400-5 (alk. paper)
1. Pricing. I. Marrs, Jason. II. Title.
HF5416.5.K462010
658.8'16-dc22 2010033556
Printed in the United States of America
15 14 13 12 10 9 8 7 6 5 4 3 2 1
Contents
PREFACE
Price, Profit, Power, and Prosperity ................ ix
About the Authors ...... ~. . . . . . . . . . . . . . . . . . . . . xix
About the Guest Contributors, xxi
SECTION I
CHAPTER 1
Price and Fee Failures by Dan Kennedy ............... 3
The Ultimate Failure, 5
CHAPTER 2
Discounting Without Damage by Jason Marrs. . . . . . . . . 9
Free as The Enemy?, 13
Can Free Be Your Ally?, 18
Two Things You Should NEVER Do. 20
CHAPTER 3
If and When You Discount,
Get Quid Pro Quo by Dan Kennedy. . . . . . . . . . . . .. i23
iii
iv • :tJO B.s. Price Strategy
Money at a Discount, 25
The Something-In-Exchange Split-Test, 26
CHAPTER 4
The Nasty Cancer of FREE by Dan Kennedy , , , , , , , , " 29
CHAPTER 5
How to Compete with Free by Jason Marrs, , , , , , , , " 37
So What Should You Do?, 40
CHAPTER 6
When FREE Is a Business, Not Just
a Price Strategy by Darin Spindler , , , , , , , , , , , , , , , , , 45
There's a Third, Superior Type of Advertising, 46
How You Can Do It Too, 48
CHAPTER 7
Antidotes to Commodity Thinking by Jason Marrs, , , , . 51
How To Conquer the #1 Enemy of Maximum Profitability:
Commoditization, 58
Just Because You Can Does Not Mean You Should, 61
Discounters Happy Being Commoditized Are Not All Bad, 63
The Secret of the Living, 64
Yes, Everybody in Marketing Points to Starbucks ... , 66
The Dynamic Power of Radical Individualism, 67
CHAPTER 8
The Power of Preeminence as
Price Strategy by Dr. Barry Lycka , , , , , , , , , , , , , , , , " 73
Approach One: The Hawaiian Fisherman's Method, 75
Approach Two: The Triangle of Pre-Eminence, 76
CONTENTS
l'J"O B.s. Price Strategy • V'
CHAPTER 9
B2B Price Wars and The Way
of the Warriors Who Win by Dan Kennedy . . . . . . . . . . 79
CHAPTER 10
Breaking Free of the
Price-Product Link by Dan Kennedy . . . . . . . . . . . . . .. 89
The Three Best Chain-Cutters, 92
CHAPTER 11
The Power of Pre-Determination by Dan Kennedy. . .. 101
CHAPTER 12
The Secret to Price Elasticity by Dean Killingback . . . .. 107
Who Is Your Best Customer?, 108
CHAPTER 13
The Making of Propositions by Dan Kennedy . . . . . . .. 113
Five Kinds of Propositions, 115
CHAPTER 14
The Place Strategy That Easily and Automatically
Supports Premium Prices by Dan Kennedy. . . . . . . .. 125
Isn't There Something "Wrong" with This?, 131
CHAPTER 15
How "The Company You Keep"
Can Impact Price by Dan Kennedy . . . . . . . . . . . . .. 137
CHAPTER 16
The Deadly Trap of
Bad Economics by Dan Kennedy . . . . . . . . . . . . . . .. 145
CONTENTS
vi • }fa B.S. Price Strategy
CHAPTER 17
How Do You Set Your Prices? by Jason Marrs. . . . . . .. 159
One: WAG, 160
Two: Industry Norm, 161
Three: Client-Dictated Pricing, 163
Four: Cost-Plus Pricing, 164
Five: Target Return, 166
Why Static Prices Are Impossible, 167
Objectives of a Particular Price Point, 168
Sequential Skimming, 170
Penetration Pricing, 171
CHAPTER 18
Why Not Charge People
to Buy From You? by Dan Kennedy ............... 177
CHAPTER 19
When Is Abusive Pricing Smart? by Dan Kennedy . . .. 183
Pregnant Question 1, 185
Question 2, 186
Question 3, 186
CHAPTER 20
Beware of Staff Sabotage
of Price Strategy by Jason Marrs. . . . . . . . . . . . . . . .. 195
Break the Negotiating Addiction, 200
The Easiest Way to Protect Price and Profit Strategy Is ..., 201
Get on Board or Get Out, 203
CHAPTER 21
A Jury of Four But Only
One Decides Fate by Dan Kennedy . . . . . . . . . . . . . . 207
CONTENTS
NO B.s. Price Strategy. vii
CHAPTER 22
Price in Recessions by Dan Kennedy 211
Theories About the Death of Salesmanship, 219
SECTION II
SAMPLES
CHAPTER 23
Sample Advertising and Marketing
Materials from Jason and Iso Marrs' Practice . , , , , . , , , , 223
SECTION III
RESOURCES
An Offer from Jason Marrs, 233
An Offer from Dan Kennedy, 234
Other Books by Dan Kennedy, 235
Index. , , . , , , , , ..... , . , , . , , , , , , , , ... , , , , . , , . , 237
CONTENTS
PREFACE
Price, Profit, Power,
and Prosperity
(Why and How This One Book Can Be Worth
at Least One Million Dollars to You)
Dan Kennedy
rice bedevils.
It lurks in the bushes, waiting until the sale is almost
Pmade, to leap out and scream "Boo!" Retailers fear
Walmart, to such extent some close their businesses at the mere
announcement that Walmart is coming to town. The real source
of their terror is price. Grown, mature adults engaged in B-to-B
sales quake in their boots at the prospect of facing a purchasing
agent who is known to drive a hard bargain. Business owners
routinely under-price their goods and services to come in below
competitors, surrendering to the fear of losing customers by
being judged unreasonably expensive-oddly unaffected by the
more appropriate fears of losing profits in the short-term, losing
their business to bankruptcy in the long-term. (Few lowest-price
providers have ever avoided this fate.) Price is a terrorist.
In the 1930s and 1940s, Walter Gibson, writing as Maxwell
Grant, churned out hundreds of pulp novels featuring the
mysterious crime-fighter, "The Shadow." There was also a radio
show, and more recently, a failed movie starring Alec Baldwin.
The Shadow struck such fear in evil-doers that, often, only his
i~
~ 6) ~O B.s. Price Strategy
eerie laugh was necessary for their surrender. Living in fear that
The Shadow would suddenly emerge from the dark with cape
swirling and guns blazing, they were terrorized by all shadows,
virtually driven insane by fear.
Like The Shadow, price strikes fear in the hearts of salespeople
and business owners alike-to such extent it compels business
owners to reduce their prices without any real marketplace
pressure to do so or testing to validate their fear-based decisions.
To such extent it makes the salesperson's voice quiver and
palms sweat and body language go sour when he arrives at
presentation of price, telegraphing to his prospect that the
price is too high. Like the evil-doers terrorized by all shadows,
business owners are terrorized by their fears about price rather
than by any reality.
Fear is a powerful thing. Another comic hero, Batman, is
brought to his knees by the super-villain, The Scarecrow, his only
weapon is a magic dust that creates unbridled horrific imaginings
of each person's worst fears. Sprayed in one person's eyes it
instantly triggers that individual's worst, secret nightmares.
Sprayed over an entire city, it produces mass-hypnosis, filling
the streets with imaginary monsters assaulting the population,
sending each person into spiraling horror they will do anything to
escape-including killing others and themselves. The Scarecrow
is a brilliant comic book creation, because he has no real power.
His only power comes from the fear he can create in others, a
turnabout of the idea behind his hero enemy Batman, who chose
his bat identity and costume and mystery to "strike fear in the
hearts and minds of evil-doers."
In business, fear-based decisions turn out badly; fear-
driven behavior weakens and ultimately destroys. I personally
watched the owner of a thriving $100-million-a-year company
give over a significant share of profits and control of his operations
PREFACE / PRICE. PROFIT. POWER. AND PROSPERITY