Cup of Joe: It’s All About The Benjamins
So, a few days ago I was on Twitter and a friend of mine asked her followers how much she should pay a designer for a new logo. My response was, “well, pay them what ever they invoice you for.” She then explained that this designer didn’t know how to price his logos and needed help. I remember when I first started my business I had no idea how to price products. I used to spend days analyzing the market, comparing other products and thinking of different marketing options. And then one day I realized how simple pricing really is.
I was talking to a potential client over the phone and they asked me if I could give them a ball bark figure on how much their project would cost. At the time I already had several clients and didn’t see myself getting to their project for awhile. So I figured I would try something different with them. I ended up sending them a quote for about 3 times what I had ever charged a client, thinking that they would look at the quote and I would never hear from them again and that would be history. In a few hours they emailed me back and said that they thought the quote looked reasonable and they wanted to move forward! I thought to myself, wow! All I have to do is ask for it!
Now I realize that the correct price for a product is the highest amount that your market is willing to pay. And, the only way that you can find out what that amount is, is by asking for it. This type of pricing method is called Value Based pricing. With Value Base your price reflects the value that your market places on the product.
Now sure I know what you are thinking. Isn’t it dangerous to price yourself to high? Aren’t you afraid of pricing yourself out of the market? To answer these questions let’s take a look at Wally World. Here is a corporation that’s motto is “Always Low Prices”. When Sam Walton coined that phrase in 1962 he wasn’t just launching a insightful marketing campaign, he was in fact laying the groundwork for their future pricing structure. Walmart’s dominance is dependent on selling at low prices at high volume. As a result their stores across the world are always packed.
But do you really want to be like Walmart? I mean, sure they do a lot of business, but it’s all at very low profit margins. Now, let’s take a look at the other side of town and the shops on main street. These are the locally owned mom and pop joints that maybe your neighbor runs. These shops can’t compete with Walmart’s prices and as a result they do less business. Can you guess which business model I would rather have? Well, if you guessed the local mom and pop shop, you win! Running a business that caters to the market’s lowest price point will guarantee a steady flow of consumers. But you really need to ask yourself, do I really want to do business with the cheapest folks in my market? Trust me, you don’t, they are annoying and will eat up all your time and money.
So how can you start getting paid more for your products and services. Just start asking for more. Sure you run the risk of losing potential customers, but in the end the ones that agree to pay premium prices will leave your business truly valuing their time with you, which in turn, turns into referrals and other opportunities down the road! So start asking for more and quite trying to be the “Wally World” of your industry!
Facebook Sends More News Traffic than Google News
Last week, Facebook posted instructions on how to make FB your “personalized news channel” and minimize nonnewsworthy clutter on their blog. Inspired, Hitwise looked at the numbers, and it looks like Facebook is already well on its way as a news starting point.
Hitwise’s stats show that Facebook is well ahead of some other news aggregators in terms of sending downstream traffic to news websites:
After Google (17.32%), Yahoo (7.89%) and msn (4.43%), Facebook was the fourth most popular referrer for news websites. Says Hitwise:
News and Media is the #11 downstream industry after Facebook, receiving 3.69% of the social networking site’s traffic. To offer a comparison, 6% of downstream traffic from Facebook went to Shopping and Classifieds last week [check out their downstream retail traffic] and 6% to Business and Finance and 15% went to Entertainment websites (YouTube in particular).
Clearly, news isn’t the most popular post-Facebook activity, but the chart shows that it’s been growing steadily over the last several months. (Any ideas what the spike in April was about? Conficker?)
What do you think? Will Facebook be the next big destination for news?
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Bing & Facebook Expand Search Agreement
Two years ago, Microsoft purchased a 1.6% stake in Facebook for $240M—and with the agreement that Bing would be providing web search on the world’s most popular social network. That deal is now expanding, according to the Bing blog—to not only take in an expanded, enhanced search but also more countries around the world. Most importantly, however, Bing is giving up its claim on selling Facebook advertising.
Their enhanced search is a joint effort between FB and Bing “to provide even more compelling experiences to Facebook users.” Right now, Bing provides the basic ten blue links through Facebook’s web search option, but that will expand to include “richer answers combined with tools that help customers make faster, smarter decisions,” in keeping with Bing’s “decision engine” branding. This partnership is also growing beyond the US to a worldwide agreement.
Before the last deal, Microsoft was selling advertising for Facebook in the US. The original deal expanded that relationship for Microsoft to sell display advertising on Facebook around the world. However, that’s all going away now:
[W]e made the mutual decision that Facebook would take over responsibility for selling display advertisements on its own site. We have been working together on advertising for a long time, creating the best experience for Facebook users and advertisers. Given the kinds of advertisements that make sense within a product as unique as Facebook, it just made more sense for them to take the lead on this part of their advertising strategy. MS will continue to provide search advertisements to Facebook.
At the time of the original deal, Facebook had more than 49M active users. Now, they’re up to well over 300M. While Bing is losing that display advertising market, they may be on their way out of selling advertising anyway with the pending Yahoo/MSFT deal.
What do you think? Is this a move up or down for Facebook and Bing individually?
2002 In Review: Google Powers AOL; AdWords Go Cost-Per-Click
This article is part of a series, a review of the 2000 decade and search developments. Below, major events from the year 2002 in consumer search. For the complete series, see the introduction, The Google Decade: Search In Review, 2000 To 2009.
Google Powers AOL Search
The deal for Google to provide search results for AOL Search [...]
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Super Bowl 2010 Winners: Google, Yahoo & Bing Are Ready
Super Bowl XLIV is two days away, and even though it’s always one of the most-watched TV events of the year, the major search engines are also ready for anyone searching for the latest news and information. All three already have Super Bowl shortcuts/oneboxes in place.
Google
Yahoo
Bing
No doubt each search engine will keep those updated all [...]
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Google Recommends The Competition On Your Business “Place” Page
I’m scratching my head over this one: Google has added a new content block on place pages that, quite often, gives free advertising to a local business’s competition. It’s called “Nearby places you might like” and it appears below reviews on the place page; the content block will show up to ten recommended businesses — [...]
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