I have always enjoyed sales and had an entrepreneurial spirit ever since I was a kid. I also used to love eating candy, in particular blow pops, hubba bubba, now or laters… basically the whole candy aisle. I went to Albert Einstein for my 7th grade and the school did not allow candy to be eaten in class. I didn’t know at the time, but probably all schools across America didn’t allow candy to be eaten during class. I always kept my candy in a brown paper bag and was always asked to put it away and not to eat any during class.
The other kids in the class knew that I always had candy and I remembered a kid sitting next to me asking me if he could buy a piecee of candy from me. I didn’t think much of it, but said, “sure, $.50,” and he gladly paid. Now I had to be sneaky about it because we could get into trouble for eating candy and didn’t want to think the kind of trouble i would get into for pushing the sweet taboo during class. Little did I notice, other kids noticed the transaction.
That night when I went home, I calculated how many piece of candy I get for every dollar I spent and found out that the candy transaction that occurred during class was a high margin transaction for me. I also remembered going to the large Costco like department stores that sold the candy in bulk and made it a point to bring my calculator the next time I went shopping with my mom.
During our next trip to the store, I calculated the cost and number of candy to figure out my cost. I learned that by buying in bulk, you get a huge discount. I know my example here is small, but in my world during that time, it was a bid deal and you can alway multiply it with larger numbers, but the concept for big business is the same, but with larger volume and numbers of course.
Anyways, on with the story. I then grabbed a sheet of graph paper and started calculating different pricing scenarios and figuring out the profits based upon pricing. I got really excited about the possibility of making the highest margin, but I had figured at that price, the kids would simply buy their own and bring it themselves. The sweet spot (pun intended) was a great price and I had past success with the $0.50 sale prior and I would have more than doubled my cost in selling it at that price.
I realized that at that price, the kids could have easily purchased their own candy on their way to school for a much cheaper price at the local quick market, but I learned that in selling it in class, created an “experience” and justified a higher price. Now think about it, my big competitors were readily available on every corner and the cost was significantly lower and here I was starting my own little selling empire competing against the Quick Market giants. The competitive advantage I had over them was that I used creativity to sell my products at a much higher price, and also had people looking forward to buying my product.
So, I planned to start my marketing campaign by stirring up excitement about my candy selling scheme. I told a lot of the kids in the class that I will always have candy available for sale, but they can only purchase it during class and they had to be sneaky and not get caught. So the game was, they had to pass the order to me, then I had to send a note back with the price and then they had to send me the money which got a lot of people involved as they passed it hand by hand down the aisle to me. I then had to send the merchandise to them. It was an event I honestly enjoyed and the others in the class really got a kick out of it as well. The teacher probably aways wondered why we were quiet when she wasn’t facing us and had a lot of shuffling and movement.
Basically, I made it a game and even though the product was candy, what I was really selling was the experience. Because of this, I was able to charge a much higher price and people were willing to pay and looked forward to it. Not only that, we always had a great laugh after class about it. I also got my first taste of sales management as other kids in the class wanted to duplicate it in their other classess. So I took my profits and bought more brown bags and candy and sold my candy to these kids wholesale.
Lots of innocent fun, but the lesson I learned early on was that I needed to learn what I am truly selling to be able to harness the pure competitive advantage of the offer. I was also able to beat out competition by being unique and different than the competition. Now think about this in your own business, whether you are an independent consultant, wedding photographer, web designer, etc., your business will not thrive and survive unless you charge enough and sell enough. Don’t only think you are selling wedding photos or a web site, think about the experience. Think about the experience you create when doing business with you versus what your competitors do. If you offer the same thing as everyone else, then the customer will easily base their decision on 1) your selling skills and 2) price. If you differentiate yourself and create a unique experience, then you will gain smoking hot referrals and you will be known for the service/product you provide as well as the experience.
I think this is called the customer experience and in creating your own “experience” for your customers, they will be more than willing to pay the higher prices and also refer more business your way.