How Do Extremely Low Prices Springboard You Into More Business And Even Bigger Profits?Part Two
So as you previously discovered in part one of this ongoing series, about how some really strategic, low initial prices, can and most definitely will, provided you structure your front end marketing funnel in the most effective way, springboard you into even greater long term profitability.
On the other hand, if you merely treat the strategic pricing of your business, products and or services, as nothing more than common place, run of the mill commodities.
Then more than likely, at some point, you will most certainly be encouraging, and setting the stage for some type of pricing war! And the inevitable race to the bottom will be unleashed!
Because remember, some of your smaller, less capitalized up and coming competitors, will make lowest price their only selling point!
So you and I want to position ourselves, so that it’s not so much about the price of goods and services, as it is about overall return on investment/(ROI.)
That way, our proven expertise, real world experiences, consistent positive results and network can and will take the front seat and become the main focus of our potential first time customers/patients and or clients attention!
Part two of this series, will focus on even more proven ways, that initial low prices can definitely be the springboard to even greater long term profits and previously untapped opportunities!
So How Do Initial low Prices Consistently Springboard Extremely Savvy Entrepreneurs Into Even More Business And Greater Long Term Profits?
Ladies & gentlemen, these next two hypothetical marketing examples, are textbook case studies, of “how” and “why” companies that understand when you can combine various fixed monthly costs of doing business.
Such as so much, per week or month for labor and other various standard overhead costs, such as fixed monthly rent/lease payments and other set monthly cost to lease various office equipment, such as phone lines and other standard office equipment etc.
And you systematically have the chance to incrementally increase your overall gross profits, and incur very little increase in your gross expenses while doing it, the wider that gap is, between the extra gross profit you produce on (either) a daily, weekly and or monthly basis and your various fixed monthly costs.
The richer and therefore more profitable you will become.
For ex: let’s take your typical (and extremely) savvy, major fast food chain. They know and understand the mathematics of selling you and I combo meals vs trying to get you and I to go back for a second retail order of anything!
Simply by making the normal portions of two or three items in a combo meal package, slightly bigger and not quite charging us double the original retail price for them. We are (statistically speaking), far more likely to spend 25-40% more upfront, as opposed to spending retail twice!Don’t you agree?
So their (so called) “Upsell” is simply built right into the original price of their strategically priced combo meal, as opposed to offering additional retail priced items to our order, after your initial purchase.That’s why savvy local Mom & Pop pizza shops and family style restaurants aggressively market items like “lunch time” specials and or extremely popular “grub stubs” etc.
Why Extremely Savvy Marketers See Initial Low Prices As The Springboard To Greater Long Term Profitability Not A Gateway To An Inevitable Price War!
Now let’s take this second textbook (hypothetical) case study marketing example. Think of any major hotel and or casino that routinely host major boxing and or concert events!
Typically (both) the major hotel and or the major casino executives, will invite major big time gamblers from all around the world and comp them (with ) either free $1,500 – $2,500 per person ringside seats at these major sporting or concert events!
And or comp them with free $10,000 dollar per night, (first class) luxury hotel accommodations!Of course the obvious question is “why?” Right?
What or where is the ultimate payoff for or to them?Well let’s do the math. If you’re a major casino, and you’re hosting a major prize fight between two extremely popular fighters.And or a concert featuring an extremely popular music icon of some kind.
And you’d like to attract some major gamblers, (more affectionately) referred to as “whales” and their entourage’s to your casino. You might give them five free ringside seats worth $2,500 dollars each.
That way, once the fight is over, the “whales” and company, will immediately head over to gaming tables, where they’ve been known to routinely drop anywhere from $750,000 to $1.5 million dollars, counting all their high end rounds of drinks, food, round the clock room service,endless shopping sprees and of course their continuous high stakes gambling!
Now weigh that against the fixed costs of giving them five or ten free ringside seats worth $2,500 dollars each!You do like the math?
Or by the same token, if you’re a major hotel and casino and your hosting a major boxing match and or concert event.
What’s it gonna hurt your bottom line to give a “whale” and their entourage five $10,000 dollar a night luxury hotel accommodations, if they’re going to spend the amount of gross dollars previously mentioned!Right?
Likewise whenever a major cruise ship trades a local TV, radio and or magazine $30,000 to $50,000 dollars worth of unsold cabins to executives for an equal amount of advertising and or air time etc!
What may not be obvious, is that both the on ship outrageously expensive “gift shops” and “casinos” and open bar would literally leap at the chance, to get some high income earners captive for 10-14 days at a time, right? 😎
So both businesses should be more than willing to help co-op the total price to the cruise ship, for offering unsold cabins to some potential big income earners!
So they could both easily afford to invest $10,000 dollars each or more! Because they’re definitely going to be part of the ultimate victors!Don’t you agree? Well then, hopefully we’ve finally cleared up any confusion, about “how” or “why” initial low prices can and definitely will lead to even more business and greater long term profitability!Right? Any questions?
Now as is customary during this part of our show.
Please share your extremely valuable comments (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!
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