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Steve Jobs understood something about marketing. And it gave him a huge competitive advantage. Today, I’m going to share that advantage with you.

It’s really simple to understand. It’s easy to deploy. It can save you an absolute fortune and also dramatically improve your results.

It starts with this age-old business fact: There’s often a very big difference between what people say and what they actually do.

Talk is not cheap

I spoke with a business owner once, who had recently surveyed his newsletter readers. He wanted to know if they’d be willing to pay for a premium version of his most popular service. He accurately described the service, including the fee.

In total, 78 people took time to respond, with 73 saying they would “happily pay for the service when it became available”.

With 73 people happy to pay for his new service, he built it, and launched it. However, despite what they said, just 8 of them actually signed up. He estimates that he lost almost $40000 in the process.

Steve Jobs understood this better than any of his competitors

Sure, it’s important for us to listen to what our marketplace is saying. But when we listen, we need to do so through a filter. We need to understand that in many cases, people will tell us:

• Things they think we want to hear.
• Things they think will make them look good.

This is why Steve Jobs shunned focus groups. He learned that people in focus groups tended to say smart, generous things in order to look good. He found their feedback to be not only of little real value, but potentially misleading. That’s a dangerous mix.

Whilst we need to listen to what people say. We tend to make massively better decisions when we watch what people do.

Early birds

This is why entrepreneurial business owners sometimes offer an early bird discount when they launch something new. For a short period of time, they offer the new (whatever) at a slightly reduced rate. They do this, primarily to measure what kind of genuine interest there is.

Here’s why.

• If the marketplace is eagerly buying, the business owner knows there’s a significant demand. At least, at the early bird price.
• However, if the marketplace isn’t interested, even at the reduced price, then something is wrong.
• Maybe the marketing needs to improve. Perhaps the product / service itself needs more value pumped into it. And it’s possible that both areas need to significantly improve before the actual launch.

That kind of real-world feedback provides data you can make decisions on, with far greater confidence than data from a survey.

Polling people with a survey can be useful. However, in business we know that actions speak louder than words. After all, great ideas are not anointed.

There are 2 business models, which have proven time and again to be extremely successful.

In today’s post, I’ll show you how both of them work, PLUS how to keep your current business model and open up a whole new marketplace!

The 2 models I’m referring to are:

1. Focusing on the maximum you can deliver.
2. Focusing on the minimum you can deliver.

Let’s start by looking at those 2 models.

The maximum model

The business owner who takes the first option, will focus on providing excellence. They’ll place a premium on exceptional customer service. They’ll set the highest possible standards and achieve them. They’ll need to unceasingly focus on delighting their customers at every opportunity.

There is a marketplace who are desperate to be treated this way. And they eagerly, willingly pay a premium. It’s an exceptionally profitable marketplace, too.

The minimum model

The business owner who takes the second option, will focus on cost efficiencies. They’ll consistently search for ways to lower their overhead. They’ll embrace automation and AI. They’ll know exactly what the minimum required is and then deliver on it.

There is a huge marketplace willing to pay for a stripped back product or service. We see them everywhere; no-frills airlines, feature phones, low price stores, etc.

The minimum model works. Really, really well.

Just don’t land somewhere in the middle

The problem comes if you fail to choose, and end up somewhere in the space between those 2 successful business models.

For example.

• Better than the minimum quality, but not premium either.
• Less expensive than the premium brands, but not inexpensive enough for the price-sensitive buyers.
• Products or services that are absolutely fine, but not remarkable enough for people to tell their friends.

By failing to choose the maximum or minimum model, you land in the anonymous middle ground; where there’s very little interest and where it’s really, really hard to get noticed.

Middle ground businesses are why networking groups exist. They have to push for referrals, because their message doesn’t spread wide enough or often enough by itself. They’re stuck in a frustrating, unending and very expensive fight for attention.

Your highly lucrative, new income stream

Here’s something worth considering for 2023. Something that can help your business thrive, whilst still retaining your existing model.

What is it?

Develop an additional, new brand; dedicated exclusively to either the maximum or the minimum edge of your marketplace.

Think about that for a moment.

This gives you the safety net of your existing model. Plus, it provides you with all the amazing opportunities that come from serving one of those highly lucrative edges. It opens up a lot of potential, yet with relatively low risk.

Yes, it takes planning. But I’ve worked on this with many clients over the years, and the results can be spectacular. It will allow you to open up a whole new legion of prospective customers or clients. I’ve seen what’s possible and it’s definitely worth considering, as part of your 2023 business development plans.

When you ask why they didn’t buy from you, prospective customers or clients often say that your prices are too high.

And it could be true.

However, it usually isn’t.

Allow me to explain.

Your prices are probably not the problem

Let’s start with a small sample of far more likely reasons for their decision.

• You could be marketing to the wrong people.
• Your marketing could be failing to clearly demonstrate enough value, making your price seem higher than they expected.
• You could be asking people to make a decision before they have all the information they need.
• Your marketing promises could be too similar to those offered by your lower priced competitors.
• Your branding could be positioning you [in the mind of your marketplace] as a lower priced provider than you actually are. This is really common.
• You could be contacting them at the lowest point of their cash flow cycle.
• Your payment terms may not be flexible enough for them.
• You could be responding to enquiries too slowly.
• Your marketing could be suffering from Toxic Complexity. This is dangerous and extremely common.

And there are many of other reasons. None of which have much to do with your prices or fees, and everything to do with your marketing and how you sell your products or services.

It’s a trap!

Lowering your prices can be tempting. It’s a quick and extremely easy way to make your products or services seem better value. But it’s a trap. A trap you need to avoid. A trap that can put your business in a dangerous race to the bottom. You do not want to be in a race to the bottom!

A far better alternative is to find out what’s actually causing people to think you’re too expensive. And to then focus on improving your product, service or marketing in those key areas.

If you’re not sure where to start looking for answers, the brief list above is a useful place to begin. Try to look at each item on that list from the perspective of a potential client. For example, research your competitors to see how your; services, marketing, payment terms, promises, guarantees, branding and response times, etc., stack up against theirs.

Remember, in many cases, your prospects will have done some research before contacting you. Others will do some research after contacting you. You need to know what you’re competing against.

And make lowering your prices the very last thing you consider.