Black Friday has never held any significance to me.
I hate holiday shopping out in the chain stores (I hate shopping in chain stores altogether, except maybe Barnes & Noble when my local store doesn’t have something and I’m buying for someone else; otherwise I use Amazon).
It feels like thrashing. I know it must make money for the retailers or they wouldn’t do it. They throw up a few loss leaders, and maybe add some discounting off inflated MSRPs, and people buy the TV at a loss for the store, which makes it up with overpriced cables and other accessories.
It feels like thrashing. Reminds me of Ghostbusters (hint: everything reminds me of Ghostbusters).
“Get her, that was your whole plan, huh?”
Things get slow. Customers don’t buy when you want them to. Or expect them to. Or they simply don’t buy.
So you feel like you’re fumbling around in the dark, and you are. You don’t know how to get from here to there, and can’t understand why, why aren’t people simply signing up and trying it, or trying it and buying it?
You think the product’s great, so clearly it’s something else. So you start messing with price, as though that’s the issue, and with a 1-day only discount, or end-of-month special, they’ll buy.
And maybe some do. But what does that tell you?
Nothing. Well, maybe a little. You got someone to part with their money. But they were going to buy anyway. You might have accelerated their decision cycle, but there’s a cost to any discounting beyond the money left on the table.
I’m not going to get into pricing here; it’s a tough subject for me (and most founders, I think), and really requires more time and thought than I have right now.
What I want to point out is this: don’t panic, don’t grouse, don’t feel alone in the wilderness, and don’t discount because nothing else worked.
You need to develop a pricing strategy. You need to discover your value to potential customers. You need to test your pricing strategy. You need to dig into the data, which means you need to do the work to create the data. You need to survey your lost prospects, and find out exactly what the problem was.
- Were you really interested in our stuff?
- What did you buy?
- Why did you buy it?
- How much did you pay?
- What did they have that we didn’t have?
- What problem are you trying to address?
- Our pricing is X, was that high, low, or just right?
- What do you think about the quality of our product?
- If we had added Y, would you have been more inclined to purchase?
You have to do the research. Think of yourself as just that–a research company. When you talk with prospects, when you talk with lost prospects, when you talk with customers, you learn.
And then you can refine your offering. Maybe you’re missing a feature. Maybe the pricing is too low. Maybe if it were triple the price, people would take you seriously.
Maybe you’ve just been guessing all along.
I’m not a pricing expert, but this is about more than just pricing. Steve Blank has a lot of great material on customer development, which you should check out.
But I’ll say this: I have never felt more confident about setting product, pricing, marketing, sales, and customer service direction (strategy, tactics, tone, etc) than right after I talked with a few dozen prospects, customers, and lost prospects.
And out of those, the lost prospects can be the most valuable, because 1) they have nothing at stake and 2) you weren’t good enough for them and only they can tell you why.
Your customers? Great for validation. Great for future features. But the lost prospects–those are the ones who rejected you, who had higher standards, who felt more strongly about your competition, or worse, chose not to spend money at all than to spend it on your perfect shit that simply doesn’t serve them.
Do the work.