Sep 18-23
Canmore, AB
We’ve had such amazing fall weather that I spent the time outside instead of writing the weekend’s missive. So, I looked back a year ago and thought this issue would be appropriate.
Enjoy! - H
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Sep 12, 2022
Canmore, Alberta – “$99 for a burger! You’ve got to be kidding me?”
Can’t read the full email – click here for the online
version.
What a couple of weeks it’s been.
First, our long-reigning monarch, Queen Elizabeth II passed away at
the age of 96!
The US Open tennis tournament featured the youngest finalists in 2 decades - the winner, becoming the youngest at a Slam since Boris Becker and the youngest #1 in the world (at only 19) – ever!
Third, Canada’s national opposition party, the Conservatives, elected a new leader with a resounding win in the first ballot of 68%. His messages containing the essence of libertarianism and grassroots is a breath of fresh air.
And lastly, summer weather has continued to bless our area, despite some cold nights and one morning with snow down below the treeline.
I was enjoying a nice beverage with friends during one of these warm, late afternoons, on the deck of one our finer hotels when we decided we should order
some food as well.
That’s when I noticed the “The King Malcolm Burger”. Priced at a modest $99!
“You can’t be
serious?!” would be the exclamation of famous tennis star, John McEnroe.
But it was.
So, we asked the waitress,
if people actually ordered this item. I mean, it seemed so outrageous.
She replied that it seemed to appeal especially well with men of large egos – looking to impress their colleagues.
With some reflection – I realised she was right.
Price does matter. But not in ways you may normally assume.
All too often, business owners believe they must compete on price. That only the lowest price will do to attract the most business. But this is not correct, all of the time and certainly does not work when the customer or client you wish to attract is affluent or wants to appear to be.
Not to mention that if you discount your products and services, you will also erode your profitability, often towards bankruptcy. I’ve helped many companies avoid that pitfall and give an example in one of my latest presentations which you can find here.
There is another hidden benefit of having an outrageously high-priced item in your offerings. All your other offers, including similar ones, will look
“cheap” in comparison.
Case in point.
The restaurant above, also featured a “Legendary
Burger” for only $26.
Really, it was just a good burger – but so much less expensive it looked like a bargain. I suspect many purchases of this item were made – with impressive margins for the establishment.
The key point I want to make is that price, is often much more elastic than you think. By being strategic with what market you wish to serve, you can use higher prices to make your offerings more attractive – not less; and earn much more profit to boot.
Until next week,
Stay healthy and focus on profit!
- Hugh
The “Profit Accelerator” Expert
P.S. Are you an independent CPA or Financial Professional, who works with small business owners? If you are, then you would like my latest presentation: “How I added $298,200 to a client's bottom line simply by examining their financial statements”.
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