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Multiples, percentages and a bit fat zero

Setting your pricing, feeling their pain and thinking outside the you-know-what

All revved up for 2011? Good. To get you going, here are just a few New Year ideas to kick-start your marketing, thanks to my trusty Nokia and good old serendipity. Yes – it’s Copycam time again.

Run the numbers

Did you buy anything in the sales? And what was it that made you rush out to the shops at the crack of dawn and jostle your way to the front of the queue? The weather? The great service? The indomitable Christmas spirit? The raging hangover? No, of course not. It was the pricing. It’s always the pricing, stupid. 30% off. 50% off. Up to 90% off! (Yeah, right.) Nothing, but nothing, gets us out of bed like a bargain. Or makes us take action right here, right now. Slap a cut-off date on the bargain and the frenzy increases. But the numbers need to stack up for people to take action.  A while back, I noticed this sign in the changing room at my gym: So it’s £15 for a small locker, and £20 for a large locker for one month. A bit steep, you might think. But you’d probably also think they’d have an incentive to get people to sign up for longer. Like mobile phone contracts do – or just about any other type of contract you can think of. So let’s see. 6 x £15, anyone? Oh yes, that would be £90. And 12 x £15? That’s right – £180. Same story with the large lockers. 6 x £20 = £120. 12 x £20 = £240. Genius. So the incentive is… absolutely nothing. People expect commitment to translate into rewards. Why sign up for 12 months instead of six when the money could be earning interest in your account rather than the gym’s? The pricing should be a no-brainer. But in this case, it’s just brainless. Lesson 1: when it comes to pricing, longer is cheaper. Always. Or, put another way, 6 x £20 is never £120. It just isn’t.

To add or not to add – VAT is the question

Last time, I talked about the opportunities and threats for companies of the VAT (value-added tax) increase from 17.5% to 20% at the start of the month. Gyms seem (see above, and below) to be a lost cause when it comes to running the numbers. But not all fitness-related businesses are. As I fought the crowds of swivel-eyed shoppers in central Cambridge, I saw a sign that warmed the cockles of my marketing heart: Clever old Sports Direct. So they’re still charging VAT at 17.5%? No, of course they aren’t. They’re charging 20% like everybody else and absorbing the difference. Which makes a difference. The store was packed with grateful shoppers who were getting a double whammy – reduced prices and reduced tax. Lesson 2: feel the pain. Then the gain.

All change, please!

Then it was down to London for a playdate with my culture buddy S at the Royal Academy. (Haven’t seen The Glasgow Boys? Hurry – it closes on 23 January. And if you can’t make that, check out this clip on the BBC 2 site. ) But wait a moment – what’s this? The train pulled in to an unfamiliar part of King’s Cross station, at a platform I’d never seen before. No, don’t get too excited: it wasn’t Platform 9¾. That’s right down the other end, through the brick wall, and leads straight to the Hogwarts Express. But it was almost as unusual: Isn’t that wonderful? A master-stroke of marketing. Months of banging, drilling, cutting and scooping and they unveil a platform with the catchiest number ever. Everybody was talking about it. Some people even took photos – well I did, together with a few trainspotting saddos with dirty anoraks and knobbly cable-knits. But still, you get the point. It was new. It was news. It was inspired. And yet it wasn’t always the plan. Originally, apparently, it was going to be called Platform Y. Not so inspired. Y chromosome. Y-fronts. Why? Obviously the planners asked themselves the same question, thought a bit about it, and came up with a simple, effective and… obvious solution. Lesson 3: make a virtue of a necessity. And never ignore the obvious.

Clitch after clitch after clitch

Every New Year I play the game. And every year, there’s a winner, without fail. Sometimes  they don’t even wait for 1 January. Last year, I spotted the winning entry on 28 December. And the aim of the game? The first outing of the perennial seasonal cliché: New Year, New You. This year, the prize went to Optical Express: But they only just won. For hot on their heels, just 10 minutes later, I spotted this: Bad, right? Well not necessarily. You see, at this time of year, even clichés have their place.  Let’s face it: Christmas and New Year are pretty clichéd, aren’t they? Same food, same TV programmes, same diamond cardies and super toiletry gift-sets from your gran. Clitch after clitch after clitch, as Bevin famously said. Original isn’t always best. After all, if your tagline is freshly minted, it has no recognition value. Clichés may be tired, old and worn, but they’re also instantly recognisable. And often, they’re just what people expect to see. So don’t disappoint them. Lesson 4: embrace your inner copycat. Even if that means a cliché or two.

Related posts:

  1. What does your phone say about you?
  2. The power of numbers
  3. It’s a numbers game – and one you can win
  4. The value of transparent pricing
  5. The pitfalls of special offers
Kevin Copycam, Marketing, Pricing.
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