Is Pricing A Belief Thing?

by Paul Castain on January 13, 2013

I was reading The Wall Street Journal the other day and was struck by the audacity of a towel company.

The towel company had a full page ad talking about their luxury towels.

These weren’t just any kind of towel, mind you, they were the kind of towels you find at the resorts and you could even get your monogram on them.

Truth be told, I could care less about my towels and the only reason I would pay more for a towel would be if I knew the towel itself could be somewhat compensated for having to dry my fat ass.

Other than that . . . it’s a towel!

I could buy that towel pretty much anywhere, substantially lower and monogramming isn’t important because I’m not worried about anyone trying to steal my towels.

Note: I’d like to monogram my bottle of Cabo Wabo.

But seriously . . .

It begs the question . . .

Who was the gutsy one here?

Was it the towel company who believed in their product?

Or was it the account executive, who convinced a company (with a product you could basically buy anywhere), to change their thinking and drop a minimum of $50,000.00?

Oh, and let’s not forget the people who would actually drop the money on a luxury towel.

There seems like an awful lot of belief going on here and people will pay a premium for something they believe in.

Do you agree?

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  • http://twitter.com/MZazeela Marc Zazeela

    Paul – I like this.

    People will pay more for most anything, if they perceive it has the value they are looking for. I think it is important to remember that we cannot define value to our customers, they have to define it to us.

    I may think of my ultra luxurious, monogrammed towel as the most important part of my day. Therefore, I am more than happy to pay a premium to get exactly what I consider to be most important.

    Oh, and for the record, I couldn’t care less if I used a paper towel to dry myself.

    Cheers,
    Marc

  • http://yoursalesplaybook.com paulcastain

    Ha! That makes two of us Marc!

    How about a monogrammed paper towel? :)

    Thanks for taking the time to share your thoughts!

  • http://twitter.com/AlistairKershaw Alistair Kershaw

    You also have to ask the purpose of purchase.
    If I was buying a towel for my own use, I’d grab one from a local retailer after having had a fondle of the goods and considered the price, usual sort of thing. If I was buying a towel as a gift, I’d want it to be “posh” and look like a “Nice gift”. Branding of the manufacturer, packaging, gift monogramming and the like may encourage me to buy that product.
    If I was buying towels for a premium health spa or therapeutic resort or whatever then I’d want to know how they would affect my customers’ perception of my facility, monogramming is part of the branding, may reduce towel theft, and maybe a better towel will last longer before I need to replace them all again, meaning a price performance calculation may be part of the sell.
    Price is part of the package. I recall years ago I had an old Cavalier I had bought as a stop-gap/winter beater. When I bought a nice car to replace it I just wanted the old car gone as quick as possible. As this was before eBay days I put it in the local paper for a rock bottom price and got no calls. There it sat for 2 or 3 weeks. No calls. I doubled the asking price and got a load of calls and sold it quickly to the first people who came to see it.

  • francey@sroberts-specialty.com

    sent a message, but I think it is stuck in cyberspace!

  • Lynda

    To a certain extent I am a believer that you get what you pay for.

    In the print industry and thanks to the introduction of personal
    computers years ago, the client was suddenly able to perform their own layouts
    with much pride and yes, a cost savings. Unfortunately, those of us
    that know typography and layout must reserve our criticism as we know for a
    fact that our professionals could have vastly improved the end result – but for
    a price.

    And maybe the towel is a gender thing – this gal would rather use a
    soft, plush towel any day on the backside versus a paper towel. Sorry guys.

  • http://yoursalesplaybook.com paulcastain

    What happened Francey?

  • francey@sroberts-specialty.com

    wrote a message, and I guess i didn’t know how to get it on here.

  • http://yoursalesplaybook.com paulcastain

    Sorry about that!

  • http://yoursalesplaybook.com paulcastain

    I agree Lynda and I believe many share that perspective.

    As I mentioned in one of the Printing forums earlier today . . . We’re not going to be for everyone and everyone isn’t going to be for us . . . and that’s OK!

    Thanks for sharing your thoughts. Based on your opinion of plush towels vs paper towels, I might go buy some luxury towels.

    If Mrs Uncle Paul asks . . . I’m blaming you :)

  • http://yoursalesplaybook.com paulcastain

    Spot on David.

    I particularly like “How would you serve differently if your rates were 50% higher, or 50% lower?”

    I’m not big on negotiating my prices for that reason.

    Thanks for sharing your thoughts!

  • Lynda

    Oh geez — the pressure is on!!

  • francey@sroberts-specialty.com

    not your fault! Basically, what I posted was that i am a vendor to a corporate gym. they don’t mind spending a lot for good towels, because they want their employees to feel good (warm, covered and comfortable) after they work out. THere is a market for just about everything!

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