Friday, 21 March 2014

It's not worth it

I like marketing guru Seth Godin and I've been receiving his daily blog posts for a few years now (I get them on email daily). Sometimes I just cast my eyes over them; other times they hit the nail on the head.

There has been recent discussion around a trail race that has bumped up its entry fees - somewhere in the region of around R3,000. That makes my R480 for Forest Run look positively puny - yet I don't have many of the bells-and-whistles that this event has in place. A few people have commented in the past to say that my entry fees are expensive. Funny haha - set up a spreadsheet and put in some costs and it tells a different story. And then add in time spent planning, travelling, over-nighting, days marking the route... Let's just say that entry fees should be well over R3,000...

Seth's post from yesterday really positions "It's too expensive" in an accurate light. People pay all kinds of fees for all kinds of things. When they deem something to be expensive it is either because they really do not have the money for it OR they do not think the fee charged is worth what they're getting for it.

We have options and we can choose between any number of events. If you do not think an event is worth it, don't enter it.

In my opinion organisers don't pull entry fee numbers out of a hat. They've done their research, they know their expenses and they know their market. The price is pitched accordingly.

There are many events that I think are pricey; but they're evidently too pricey for ME because I do not see the value in paying that amount of money for that event. Yet, plenty of other people see a different value in doing the event and they happily pay the asked price to do it.

I've pasted Seth's post below. You can read the original post (20 March 2014) - and many, many others - on his blog - "What does,'it's too expensive,' mean?".

Sometimes it means, "there isn't enough money to pay for that." Certainly, among the undeserving poor, this happens all the time. And for things like health care and education, tragically, it happens too often.
But most of the time (in the commercialized, wealthier part of the world that many of us live in), the things that are within the realm of possibility could be paid for (even the edge cases could, if we found friends and neighbors and went deep into debt). One person might say a stereo or a sizable charitable donation or a golf club membership is "too expensive" while someone else with the same income might happily pay for it. "It's too expensive," almost never means, "there isn't enough money if I think it's worth it."
Social entrepreneurs are often chagrined to discover that low-income communities around the world that said their innovation was, "too expensive" figured out how to find the money to buy a cell phone instead. Even at the bottom of the pyramid, many people find a way to pay for the things they value.
The same is true for real estate, ad buys and productivity improvements in the b2b sector. If an investment is going to pay for itself, "it's too expensive," rarely means, "we can't afford it."
Often, it actually means, "it's not worth it." This is a totally different analysis, of course. Lots of things aren't worth it, at least to you, right now. I think it's safe to assume that when you hear a potential customer say, "it's too expensive," what you're really hearing is something quite specific. A $400 bottle of water is too expensive to just about everyone, even to people with more than $500 in the bank. They have the cash, but they sure don't want to spend it, not on something they think is worth less than it costs.
Not everyone will value your offering the same, so if you wait for no one to say, "it's too expensive" before you go to market, you will never go to market. The challenge isn't in pleasing everyone, it's in finding the few who see the value (and thus the bargain) in what's on offer.
Culturally, we create boundaries for what something is worth. A pomegranate juice on the streets of Istanbul costs a dollar, and it's delicious. The same juice in New York would be seen as a bargain for five times as much money. Clearly, we're not discussing the ability to pay nor are we considering the absolute value of a glass of juice. No, it's about our expectation of what people like us pay for something like that.
Start with a tribe or community that in fact does value what you do. And then do an ever better job of explaining and storytelling, increasing the perceived value instead of lowering the price. (Even better, actually increase the value delivered). When you don't need everyone to buy what you sell, "it's too expensive" from some is actually a useful reminder that you've priced this appropriately for the rest of your audience.
Over time, as influencers within a tribe embrace the higher value (and higher price) then the culture starts to change. When people like us start to pay more for something like that, it becomes natural (and even urgent) for us to pay for it too.


Robert Green said...

Very well written and explained. One thing that I can add is timing/circumstances can have an impact on perceived worth. e.g. I have run London marathon and considered it worthwhile at the thousand pound entry fee. My London colleagues consider it overpriced and have not done it. They live in London and have many other options at lower prices. I was going on a special European holiday and for me the price of doing the London Marathon to make the holiday special was justified. If I lived in London I may have felt the same as them.

adventurelisa said...

Rob, you're so right. 'Expensive' events will become once-off "Gotta tick this off my must-do list" events. It's ok to pay higher-than-comfortable fees once.

This makes me think about the top, competitive runners. They may do it once, under their own steam. But if the field is going to be competitive, then a good number of people will need free entries to persuade them to attend.

And maybe this too will spark rivalry between events where many will offer the good runners free entries and they can literally pick and choose where they want to go - much like competitive marathon running (and certainly big trail events abroad).

Staci said...

Good post Lisa. I am having issues with the entry fee for a number of new trail races and you are correct - it is expensive only because of the perception of value that i am receiving. Thanks for sharing the post.