Latest / Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint / Price vs. Value: Why Your Product Isn't Too Expensive
Transcript
- 0:01Hello and welcome to the show. Apologies before I begin because
- 0:06today is a late night recording and I'm not in my audio booth so
- 0:10expect to hear some noise bleeding in from the background.
- 0:14Now let's see. OK, so listener shout out and
- 0:20I'm shouting out Uzoma or Ranibo.
- 0:23I hope I'm pronouncing your name correctly.
- 0:25He's a copywriting coach based out of Lagos, Nigeria.
- 0:29He we have exchanged a few LinkedIn messages.
- 0:34Of course, he found me because of the podcast and he was real
- 0:39grateful about the business wisdom that I put out over here
- 0:42on the podcast and let's see what else.
- 0:44And he also said that my sales and marketing strategies are
- 0:47profound. And I'm really grateful for the
- 0:52kind words. And I'd like to thank Uzoma
- 0:55Oranibo and all of the podcast listeners who share his
- 0:59sentiments that I'm going to do my best to make sure that your
- 1:02confidence in me is justified. So keep listening.
- 1:07Also keep sharing if you find any content here valuable, so
- 1:12share with other people. Then if you think there's
- 1:14anything here that needs clarification, connect with me
- 1:18and I'll answer. I definitely answer all my
- 1:20messages within A 12 ish, 24 hour ish window.
- 1:26So reach out and let's have a chat.
- 1:30So today I'd like us to make a detour from what we're
- 1:34discussing. And that's because I had a chat
- 1:37with some folks earlier, all two people who are an employee of a
- 1:44client of mine. Well, OK, Well, we had to have
- 1:49the pricing conversation because I noticed that it's something
- 1:51that keeps coming up time and time again.
- 1:54And for some reason, we can't seem to get sales people to get
- 2:01rid of this pricing thing in their heads.
- 2:05Although in my own case, I would say I was lucky because of some
- 2:08experiences that I had very early in business.
- 2:10And I'm going to talk about it as the podcast, you know, as we
- 2:15continue with this podcast episode.
- 2:18But I'd like to talk to those who are not the owners of the
- 2:22business. I mean, if you are self-employed
- 2:25or you're the business owner and you have pricing hang ups, you
- 2:27know, I understand because, you know, we start off the business
- 2:31in the beginning. The business is you and you are
- 2:33the business. So it's OK to take things
- 2:35personal. I mean, I understand 100%.
- 2:39But The thing is, if you have a job to do as a salesperson or as
- 2:42a customer service person, as a marketing person, you really
- 2:46can't have hang ups over whether the price is realistic or not.
- 2:52The thing is the price is the price.
- 2:54Someone is definitely selling out those prices.
- 2:56Your job is to figure out whether you can sell at this
- 2:58price or not. I would advise you guys to take
- 3:03the challenge, try and sell at those prices if you think it's
- 3:07unrealistic. I think you should might be
- 3:12harsh, but I really think maybe you should look for another
- 3:14organization where people sell cheaper enough and you have more
- 3:19faith in what the other business owner is trying to do.
- 3:24But we shouldn't give ourselves all these pricing hang ups.
- 3:28So any of the employees in question are responsible for
- 3:32selling expensive installation systems things in the electrical
- 3:37space. I haven't been talking about
- 3:38them yet because the Commission is still ongoing and I prefer to
- 3:43wrap things up with the client. Be sure that everybody's happy
- 3:48and we're able to achieve the goals that we started off in the
- 3:50beginning. So it's only when I'm done with
- 3:53that, that then I make podcast episodes about that.
- 3:55So I might talk about them in detail in the future.
- 4:00But this is pretty much what I told the team that the function
- 4:06of price in a business right now, currently world over,
- 4:11pricing is either cost based or value based.
- 4:16You're going to find other theories of pricing, including
- 4:20what's it called, auction based pricing, you know, like Google
- 4:27and what's this other one, the taxi people, the taxi people,
- 4:33the Oibo taxi company, what's it called?
- 4:37Bolts and the rest of them. So where the price goes up or
- 4:43down depending on the level of demand, you know, things like
- 4:46that. So yeah, they're all those fancy
- 4:48theories on pricing. But for average folks like you
- 4:51and me, you'll find that the cost of your business or your
- 4:53services is going to be either cost based or value based.
- 4:57Cost based just means you're taking into account the fixed or
- 5:01variable costs that go into producing this thing.
- 5:04How much do you pay for NEPA? How much do you pay service
- 5:07people? How much are you paying for
- 5:08fuel? What else?
- 5:11All those costs, fixed costs, variable costs, everything
- 5:13together. And if it costs you, you know,
- 5:18you just add everything together and then how much do you want to
- 5:20put in your pocket to drop down on top average it divided by the
- 5:24number of customers you think you're going to get and that's
- 5:27it. That's your cost.
- 5:29Now the thing about cost based pricing is this, especially if
- 5:33you're in a place like Nigeria where in recent times inflation
- 5:38has just gone really crazy. The cost of the input, OK, well
- 5:44labour, the cost of labour has been staying fairly ish
- 5:49constant. We only just had an increase in
- 5:51the minimum wage. That's for those who are
- 5:55government workers. So you can say maybe the cost of
- 5:57labour is fairly constant, but the cost of materials keeps
- 6:00going up and up and up and up and up.
- 6:02So there are some businesses where to be honest, if the
- 6:06business is running on a cost based thing, you have no control
- 6:09over that. If the price of cement has gone
- 6:12from X to Y over the course of the last four months, then the
- 6:16cost has changed. It's that simple.
- 6:19It is either the business owner will keep quiet and swallow the
- 6:22loss himself or the business owner is going to put it on top
- 6:27of the goods. So if you're a sales person or
- 6:30you're a marketer for this sort of person, it's not in your
- 6:33hand. If it's cost based, it's cost
- 6:35based. It's that simple.
- 6:36If the cost of fuel has gone up, if the cost of wires has gone
- 6:40up, if the cost of cement has gone up, or if it's an eatery
- 6:44and the cost of beans and Gary has gone up, if it has gone up,
- 6:47it has gone up. It's that simple.
- 6:49It's none of your business. Your job is to sell.
- 6:51Your job is to do social media marketing.
- 6:53Just do your job the best that you can.
- 6:56Your job is not to say Madam, we can't sell more fufu because the
- 7:01price is high, Madam. If you bring the fufu low, then
- 7:05we'll sell more. That's not your place.
- 7:08Your job is sell the best way you can.
- 7:11If it's cost based, it's cost based.
- 7:13Then there's the value based pricing.
- 7:16Value. The theory behind value based
- 7:18pricing is this, that when you're going to sell your
- 7:21product or your service, you're going to put a price that people
- 7:24in the market are willing to bear.
- 7:27So The thing is this, yes, you might think you're Olga or
- 7:31you're Madam that the product is expensive, but the question is,
- 7:36is there one other person, maybe two or three other people who
- 7:40are selling at that price range? You will find that the answer is
- 7:43yes. You will find that there are
- 7:46also another 4-5 or six who are selling higher than the current
- 7:52price range and they're still in business.
- 7:55So looking at things from a value based pricing perspective,
- 7:59if the market can accommodate XYZ prices which are your own
- 8:04level or higher than then what are you complaining about?
- 8:08The thing is you try and figure out these other people that are
- 8:11selling at our price, how are they doing it?
- 8:15All these other people that are selling above our own price, how
- 8:19are they doing it? What are the tips, the tricks,
- 8:22the techniques, the tactics do whatever.
- 8:25Let's try and figure out how are they doing it because chances,
- 8:30the chances that you are the most expensive person in your
- 8:32market is very, very low. Trust me, you might think your
- 8:36prices are high right now go and look in the market.
- 8:39You'll find one or two people who are priced more than you.
- 8:44So bottom line, what I'm trying to say is this, if you're the
- 8:47business owner and you're afraid you understand just your price
- 8:50up and down, no problem. I, I feel you.
- 8:55It's something that we service based professionals we face all
- 9:00the time. So I get you.
- 9:02I feel you, but that's a different conversation.
- 9:04I'm talking to people now who are the employees.
- 9:07Just remove your mind from this whole pricing thing.
- 9:10The price has been fixed. It is fixed.
- 9:14Can you settle it? Take the challenge, rise to the
- 9:17occasion. If you really can't sell it and
- 9:19you don't believe you're better off moving someplace else where
- 9:24The thing is cheaper. So don't tell you Madam.
- 9:27Reduce the cost of your rice and your fufu.
- 9:29Just go to a restaurant that sells cheaper food and you'll be
- 9:32fine. So summary, you have nothing to
- 9:38say about the price. Stop worrying about the price.
- 9:44Try your best, do your job. You will find that you're going
- 9:47to be better off for it because if you take the challenge now
- 9:51and learn how to sell based on value, the more expensive item
- 9:55when you move from here to another business, you're going
- 9:58to be able to command a better salary, better commissions
- 10:01because of the skills that you've been able to get.
- 10:05And then one day you're going to have your own business.
- 10:08And when you do, you will find that you're not going to be
- 10:10going through those price mood swings that certain people go
- 10:17through. You know, when you're the
- 10:18business owner, you'd be worried aha is my price too high?
- 10:22Is it is it damaging my profits? Was my price too low?
- 10:25Was my price too? This once you get into that
- 10:28habit of learning to sell, learning to sell on value,
- 10:34you're going to be much better off for it when you start your
- 10:38business. But anyway, the story that I
- 10:45hinted to you guys earlier, I guess I might as well just say
- 10:47it now. I, when I started off in my
- 10:51wedding photography business, I got a very harsh baptism early
- 10:56in my career. And I'm happy that I did because
- 11:01for me, this pricing thing, so excuse me.
- 11:05So for me, this pricing thing is not, is not theory, it's
- 11:09practical. I've lived through it and this
- 11:11is what happened to me. This is not them say them say
- 11:14I'm telling you what happened to me.
- 11:16So I finished law school and did digital practice like a year and
- 11:25a half, then went for masters after masters, worked in the
- 11:30civil service maybe another 3-4 years kind of.
- 11:34And of course, you know, while abroad, I met a couple of
- 11:37people, came back to Niger, started this wedding photography
- 11:40thing. That was before we did the the
- 11:45export business, the aggregate export business, me and my
- 11:48brother. So one of my classmates was now
- 11:51getting married back in Aberdeen.
- 11:53Everybody knew I was handy with the camera, so she reached out.
- 11:56I said no, I had no problem. Now they'll hook you up.
- 12:00So she said how much? I told her 250K.
- 12:04She started pricing back and forth, using me to price
- 12:07Groundnut, no Wahala, there's no problem.
- 12:09We're classmates see finish and then plus I didn't feel too
- 12:15confident about my skills at the time because for those of you
- 12:19who've been listening for any length of time, you would
- 12:22remember that the first job I tried to quote for wedding
- 12:25photography was I sell 400K. And the bride now said, oh,
- 12:28thank you very much. You want to use me to build
- 12:30house. And I was like begging her to
- 12:32stay on the phone when I'm just saying that that whole thing
- 12:35rocked my confidence. Then from that 400, I moved down
- 12:38to 50K. So it's from 50K weddings.
- 12:42I started building my confidence back up small, small, small.
- 12:46So I told her, 250, we begin the press back and forth.
- 12:51I can't remember how much we agreed, but this is the thing
- 12:54you have to bear in mind. 250K, she said, too expensive.
- 13:01Now this is what happened. The photographer that they went
- 13:04with is a guy called GD Alakija. You guys can Jack him up on
- 13:08Instagram. GDGIDE.
- 13:12Sorry, GI. Yeah.
- 13:13JIDE Alakija. ALAKIJA, I want you guys to
- 13:19check this so you see that this is life.
- 13:20I'm not making stuff up. So GTA is a Nigerian born but
- 13:27does his thing in America. So back then it was considered
- 13:32the top photographer. But I've been out of the game
- 13:35for a while, so I'm not sure you know who is who, like who's the
- 13:37top Nigerian photographer and or whatnot.
- 13:40But yeah, he's still in the game shop.
- 13:43SO250K. He said I was too expensive.
- 13:48No problem Jidi Alakija, that's the person they got and at the
- 13:52time more than a decade and a half ago, they paid him over a
- 13:57million naira to come and cover their wedding.
- 14:01Now I'm not shitting you guys, I'm telling you guys the truth.
- 14:04I live this on my own self. Somebody was pricing ME250K then
- 14:10left me, said 250K was too expensive, left me and I went to
- 14:14go and pay over one M to go and bring somebody else come and
- 14:17photograph the wedding. So for me it was a very big
- 14:21baptism. That is when I learned first
- 14:24hand not reading business book. I learned that look, there's a
- 14:27difference between price and value or perceived value.
- 14:34And it's part of what set me off on this path that I am on today
- 14:39because I have lived it. So me, I didn't have the liver
- 14:45or the skill set or the experience or the expertise or
- 14:48the whatever to charge 1M plus. But clearly somebody else could
- 14:57and did and I saw. So for me, the challenge was now
- 15:03to learn how to sell or get the credibility or the expertise or
- 15:12the whatever to move my earning potential up.
- 15:17So for those of you who are still stuck in this whole price,
- 15:20price, price, price, price thing, I pray you don't receive
- 15:24the kind of baptism that I received.
- 15:25Because for some people, it crushes their confidence.
- 15:29Now some photographers who actually leave the space because
- 15:31of this sort of thing when you're trying to pull your own
- 15:33market, you're trying to charge once more, 150, two 100K people
- 15:37continue to price you, continue to price you.
- 15:39And then meanwhile you see other people outside charging 506
- 15:42hundred. And then some people just give
- 15:44up on like, man, I'm not in this thing anymore.
- 15:48And then they they leave and then they go do something else.
- 15:51If you have a rich uncle who hook you up, you get a job in
- 15:53NPC. I've seen one or two people.
- 15:56You know, that's how they left the game.
- 15:59But just know that. So excuse me, there are some
- 16:04legitimate concerns about price, but because price is the easiest
- 16:07thing to tweak, to tweak it is the first thing, the default
- 16:11thing that most people are going to fall are going to start
- 16:14adjusting. But no, learn how to sell on
- 16:18value or learn how to sell on perceived value or learn how to
- 16:22sell on packaging or learn how to sell on whatever it is that
- 16:25you want to call it. You know, when I was in Lagos,
- 16:28that's how negotiations used to say any small thing, they'll say
- 16:30packaging, packaging now on our packaging.
- 16:32Yeah, no problem. Learn the packaging, stop
- 16:35tweaking the price. So price was not the problem in
- 16:39this case, but value or the perceived value.
- 16:42So me Tavajima, perceived value of 250K too expensive.
- 16:49GD Alakija, perceived value of 1 M is worth it.
- 16:55Transfer the money to GD Alakija, fly him down, let him
- 16:59cover the wedding. So it's about value or perceived
- 17:02value. Now this is an extreme example
- 17:04is an extreme case, but it proves the point that I'm trying
- 17:10to make, which is you right now thinking price, price, price.
- 17:15Too expensive, too expensive. You might not be able to sell a
- 17:18million naira package. Somebody else is clearly selling
- 17:22a million naira package. Stop giving excuses about the
- 17:27product or the service being too expensive.
- 17:30Focus on a few things. Focus on the person who is doing
- 17:35expensive value proposition in your industry or in your space.
- 17:39See what you can imbibe from that person and then improve
- 17:42your market. Because this price, price, price
- 17:44thing, you only go down, down, down, down, down, down.
- 17:47It's it's backward. How do you say it backward ever
- 17:52for whatever. That's what happens on price.
- 17:56I've seen it happen amongst ready photographers.
- 17:58You see somebody, the guy or the girl has a good game like
- 18:03correct photographers, strong artist, but you feel like you
- 18:06can't hold your 250. Then you start charging 200.
- 18:11You feel like you can't hold the 200.
- 18:12Then you start charging 180. You feel like you can't hold the
- 18:16180. Then you start charging 150.
- 18:19And then unfortunately, regime change, somebody else will
- 18:23enter. They remove your scarcity, price
- 18:26of everything will go up. You now start struggling more
- 18:28than you struggling before. I've lived this before.
- 18:35In fact, we are living it right now.
- 18:38Before now, before the election, you probably were saying my
- 18:40price is too high, my price is too high.
- 18:42You'll be removing a small, small.
- 18:43You remove 50K, you remove 20K, then tenable comes in.
- 18:47Then what happens then if you all goes up, we're now paying
- 18:52close to 700. OK, well not in Abuja anyway,
- 18:55but in Makudi. Mum see them, they're paying
- 18:58like 720 per litre. If you reach Popsy's place,
- 19:03Boco, like 750 per litre and you are struggling before elections
- 19:10now you're going to be struggling even more.
- 19:12If I forget this price thing, please.
- 19:14Sometimes the thing just makes me mad.
- 19:16But anyway, I guess you have to receive the baptism that I
- 19:19received to realize that a modest pricing thing is not as
- 19:23simple as it seems. It's not as simple as if you
- 19:26remove 29 from your price, then people will start pouring and
- 19:30and you're going to get rich. Doesn't work like that.
- 19:33So figure out the people that have expensive value
- 19:37propositions. What are they doing?
- 19:39We'll Start learning. Make sure that your lead
- 19:42generation is set up so that the people that you're speaking to
- 19:45are the people who are likely going to buy.
- 19:50Sometimes the problem is just that you're speaking to the
- 19:52wrong person. Try to look for how you start
- 19:53talking to the right people. I to do the wedding photography
- 19:59business when I moved to Abuja because my wife is in Abuja and
- 20:05shortening back and forth Lagos, the thing was not working out
- 20:07for me so I moved to Abuja. So one of the first things I did
- 20:11since me I'm a face to face kind of person.
- 20:14I always like to start face to face, talk to people, shake
- 20:17their hand, get an appointment, go to their office, you know
- 20:21that kind of thing. So I started off with.
- 20:26OK, well I didn't start off like that, but I used to go to
- 20:29wedding fairs and I also used to go to marriage classes in
- 20:32church. I quickly found out that going
- 20:35to the parishes in Maitama and maybe Al Sokoro, you know, you
- 20:41get some kind people that used to go there.
- 20:44But then going to the cathedral in Area 8, also a certain, how
- 20:52do I put it? I'm not trying to sound the
- 20:55latest here, but let's just say the earning potential of of the
- 21:01hi, how will I put it? And I'm sure you guys get what
- 21:04it is. I'm trying to say.
- 21:05There's a certain kind of people that attend Asokoro and Metama
- 21:09parishes and there's a certain kind of people that attend the
- 21:13cathedral in Area 8. And I quickly learned that,
- 21:17look, me staying in Area 8, talking to people who look at me
- 21:22and say that that's at the time, back then that my 300 was too
- 21:27expensive. Meanwhile, I know that in this
- 21:30Abuja where I am, that people that are charging 500, charging
- 21:33600, I knew that look, I have to leave this Cathedral place
- 21:38because if I stay here in Cathedral week in, week out,
- 21:41these people are telling me too expensive, too expensive, it'll
- 21:44do damage to my confidence. I was speaking to the wrong
- 21:47crowd. I removed myself from Cathedral
- 21:52where people are pricing me Groundnut, and I decided to go
- 21:55to other places where people had more realistic price
- 21:58expectations, and then I was having much more fruitful
- 22:01conversations. So yes, sometimes you have to
- 22:04remove yourself from that situation where people are using
- 22:07you to price groundnut, then have money conversations early
- 22:13so that both parties can move on if you're too far apart.
- 22:17That is why I keep telling my people, anybody that I'm working
- 22:20with, that at some point you have to say, oh, OK, I
- 22:23understand what we're talking about.
- 22:24So far from all the things we've spoken about, we can go with
- 22:31option A, Option B, option C, Any of these will work fine to
- 22:35solve the problem, but it could cost between XYZ and 123.
- 22:40Is that something that is beyond your budget?
- 22:42Put it out there and then keep quiet.
- 22:45If the person starts to fumble, you know that OK, this is not my
- 22:48person, they're freed and leave them.
- 22:51If the person says he's well, he's duel Busha, but is he
- 22:56negotiable? Can we price you now know that
- 22:58OK, there's room. You can have a realistic
- 23:01conversation with this person. Bring money expectations up
- 23:05early, bring it up respectfully, politely, and bring it up often.
- 23:10Don't spend six weeks yawning with somebody only for the
- 23:16person to tell you in week 10 you're too expensive.
- 23:20If the person is going to say you're too expensive, the person
- 23:23most in all honesty was going to say you're too expensive from
- 23:27the beginning. It is better to find out after
- 23:30you guys when you guys are just in talking stage two
- 23:33conversations. It's best to find out there and
- 23:35kill it now for you to be follow up chasing, toasting, building
- 23:40rapport. You now enter week seven, week
- 23:42eight and they're now saying you're too expensive.
- 23:45Let me talk to my husband. Let me talk to my brother, let
- 23:48me talk to this person, let me talk to that person.
- 23:51So Monday conversations, expectations, bring it up
- 23:53quickly. Anyway, I'm rambling too much
- 23:56about this whole price thing, but just to let you guys know
- 23:59that tweaking your price is not the way forward.
- 24:02It's a downward spiral for those of us who are artists, you know,
- 24:06wedding photographers, Carpenter, cake artist, caterer,
- 24:13things like that. All these pricing thing, you'll
- 24:15mess with your head if you have come in and you have set your
- 24:19price for your cakes based on what you've been seeing outside
- 24:23or based on how you calculated everything.
- 24:26Your prices is either cost based or is value based.
- 24:29Have you fixed it? Just leave it if you're
- 24:32charging, OK? I don't know anybody who's
- 24:34charging 30K for a cake. Now for a birthday cake.
- 24:37Well, if you're charging 30K for a birthday cake, you see that
- 24:40your mid size, some of them are charging 30K, maybe some of them
- 24:43are charging 50, but 30, you feel you're comfortable with
- 24:48that, keep that price at that 30.
- 24:50The challenge now is how many of that 30K cakes can I sell?
- 24:56If I'm selling two a month, let me see how next month I can sell
- 24:593. If I managed to stabilize that,
- 25:02three, no problem and I'm doing 3 cakes for another four or five
- 25:05months, no problem. Then for later half of the year,
- 25:08let me see how I can do that Three.
- 25:10Let's see if we can enter four, maybe even enter 5.
- 25:14But the whole pricing thing, thinking that if I cut my price
- 25:18down from 30K to 25K, then people will now start rushing my
- 25:23cake and it doesn't happen like that too.
- 25:26Don't try and lower your price into prosperity or whatever
- 25:31because it doesn't happen. It doesn't work that way.
- 25:34And if you're an employee, the challenge is very simple.
- 25:37Auger or Madam has fixed the price.
- 25:39They have fixed it. The only challenge now is try
- 25:43and sell at that price. If you don't believe in the
- 25:45product then just move and make your life easier because there's
- 25:50no point staying in the job. January you're quarreling with
- 25:54your boss, everything is too expensive.
- 25:57February you're quarreling with your boss, everything is too
- 25:59expensive. July you will still quarrelling
- 26:02and then guess what? December you will still be
- 26:04quarrelling. What kind of ways is that?
- 26:06To live your life, you sure have to work every day stressed,
- 26:12feeling under pressure, being given what you think are
- 26:16unrealistic quotas and then you're always give an excuse and
- 26:19then our guy is always thinking you should sell more about them
- 26:21is always thinking you should sell more.
- 26:23Just simplify your life. If you don't believe, just move
- 26:26and go someplace else that is in line with your own price.
- 26:30But before you leave, let me assure you this is what is going
- 26:34to happen. If you're in this place and the
- 26:39price is 250 and you think it's too expensive and you go and
- 26:43find somebody who is selling at 200, you think no problem, I can
- 26:47sell this. Let me tell you what's going to
- 26:48happen. You enter that place, you will
- 26:51find that the same excuses people are giving at 2:50, they
- 26:54will start giving at 200. You will now start quarreling
- 26:57with this, your new Olga or your new Madam telling them the price
- 27:01is too expensive. That is what is going to happen.
- 27:05Anyway, let me get off my soapbox.
- 27:08I'm gonna harass you guys too much with my price rant.
- 27:10So that's all for today. Connect with me on WhatsApp.
- 27:14The phone number is 08064662140 and the country code is +234.
- 27:20For those of you who are not Nigerian, also connect with me
- 27:23on LinkedIn just like our guy Uzoma or Ranibo did.
- 27:29And you can confirm the spelling of my name so you can search for
- 27:32the right person. And you also get my e-mail
- 27:34address from the link where you're listening to this
- 27:36episode. So thank you very much for your
- 27:38time and attention. I'll catch you guys at the next
- 27:41recording.