Less Margin – More Volume

What is the right price to sell your product. There are entire books dedicated to the subject. There are also folks who break it down to nothing more complicated than supply and demand. While I agree that supply and demand is the overwhelming driving force in price determination, I would like to suggest the idea that there is yet another variable to be considered. Before we get there check out this video from Brett Whitlock at Whitlock Motors who talks about margins.

In today’s social media climate I would like to offer the idea that social capital is another variable to be gained through pricing in a competitive way. As Brett points out the more people who have a positive experience with you, the more people you have spreading your message.

Sure you can take this too far. You have to make a profit, but don’t discount the value of an excited customer vs. a satisfied customer. A satisfied customer feels neutral at the end of a transaction. They got a fair price and the next time they are likely to start the process over again with you on a level playing field with your competitors. An excited customer on the other hand is more likely to tell a friend, and during the next purchase is less likely to shop your competition.

Supply. Demand. Social Capital.

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