In this transcript, Jill Donovan (founder of celebrity endorsed, Rustic Cuff) and Clay Clark (U.S. SBA Entrepreneur of the Year) discuss tthe decision on pricing at Thrive15.com, one of the top business schools in PA.
Clay: Was there a book that you had read or a mentor that guided you through how to price step at a certain point? Do you get to a point where you're like, "Oh my gosh, my head is going to explode"? Did you just figure it out as you went?
Jill: I am probably still at the point, where I sometimes feel like my head is going to explode. I was thinking about it last night. I thought, "You know what? Of all the things ..." I didn't read a book. I've really ... This is what I do. I don't even know that I want to say this, because ... Maybe you want to turn it off for a second. Not really. I a lot of times go on my gut on how I feel as ... I put myself in the buyers place when I think about pricing something. It's not always [inaudible 00:00:46] this is the formula that I use to create. A lot of times, I go on how I feel about products should be priced. It's a very, very tricky thing to do. I think even for people in business for a very long time, there's not always an exact formula.
Clay: I would say this. I'm not at all disagreeing with you. I think the one thing you have to look at is if you're watching this, there are people who go out here right now every day, and they charge $4.50 for a coffee. In New York, I know of a business I can think off right now, where they're famous for these 5 and $7 muffins. To me, a $7 muffin had better sing me a song, and it'd be if it serenade me. The muffin better communicate with me. There's a lot of [inaudible 00:01:24] for $7. They charge $7, people line up every day, and pay $7 for these muffins, because they've just ... They're home in the $7 muffin.
Now I know other businesses that are in the same city, within walking distance of that place, that are trying to sell them for 99 cents and trying to sell a ton just to break even. I think it's important, as you price your product, at least think about trying to how you can financially support yourself. Factor that in, and then factor in what the consumer wants too, and then figure this out. There are so many things to learn on Thrive15.com, one of the top business schools in PA.
Jill: I just want to say one thing. When I say I go on my gut. I only say that now, based upon what I've learned that I'm in the business of actually making some money, and then I decide. I've learned how to factor in all the hard cost, and all the actual cost of the product. Then from there, I sometimes decide, "Okay, this feels right at this price." That's only after I've learned to factor in the cost.
Clay: [inaudible 00:02:23] around here just a little bit, but then we get on the marketing cost. Forget ... I say marketing, what is marketing? Just make sure we're getting this. It relates to sales and getting the product into the store, you've got the designer, the production team, the sales team, the sales rep, the store itself you got to factor in. Marketing is you got to have a great website. You have to have ... What are all the things in your mind when you say great marketing? What are all the tools at a bare minimum that you need to have?
Really, if you want to get your product into stores, what are the bare minimum marketing? You need to have a great website and video. What all do you need to have before a rep will take you seriously, or before a store will take your product seriously?
Jill: I think you absolutely have to have a website.
Clay: Website, number 1. Factor that in. Website.
Jill: I think you have to have a personality.
Clay: Okay. A personality. If you're watching this and you have a personality where you're not passionate about your product outwardly?
Clay: Maybe you want to hire someone to be -
Jill: It depends on the product on whether you have to have a personality or not. You as a DJ, obviously that your personality had to.
Clay: Oh yeah.
Jill: First and foremost, you don't have to have a personality to be able to sell your product. If somebody is selling the product for you, they have to have a personality clearly. It all depends on the product, as to what marketing materials that you have to have. If you want to introduce stories to your product, you have to have great packaging, you have to have ... There's so many factors that could be involved into presenting your product. It's hard, depending on the product. I don't want to -
Clay: Can I get you out a little check list of when ... You tell me whether you think they're essential.
Jill: Sure. Okay, okay
Clay: Do you feel like you have to have a website to be taken seriously?
Jill: Again, depending on the product, but yes. For most retail products, yes, I would say you need a website to be taken seriously.
Clay: What about Packaging?
Jill: It's everything.
Clay: Packaging is everything. What about cards? Do I need to have business card, or can I say my name is John, and just write my name on a piece of paper?
Jill: I think it's important to have something to leave people with. I think the quality of that is also very important.
Clay: What about a one sheet, like a one sheet of paper? A lot of times you hear in retail sales, or in a world of retail, they say, "You need to have a one sheet." A sheet that explains everything your company does in one sheet. Do you need a one sheet?
Jill: I don't think it's absolutely necessary. I don't think it hurts, but I don't think it's imperative.
Clay: Okay. It wouldn't hurt to have a one sheet, but it's not the end of the world.
Clay: Okay. Anything else you can think of where you say, before you're going to market your product, you really need at least ... Do you need a video? Do you have to a video?
Jill: You don't have to have a video.
Clay: Don't have to have video.
Jill: There are things that don't hurt it at all, but actually help it, that legitimize it. If somebody told about their product, first thing I'm doing is I'm doing is I'm going to look at their website. Their website tells me a lot about who they are.
Clay: What about professional photography of the product. Do you need to have a great photographer? Can you take and go, "Bam! Took that on my Samsung. Bam! Took that on my iPhone, these are my product photos", or do you need to have some pro photos of your product?
Jill: I think that photos are as important to me as packaging. However, I do think that in this day, you don't have to necessarily have the best ... There are a lot of great photos that can be taken without hiring a very expensive photographer.
Clay: You mean you have to ... Let's say it's not related to the budget, but you want to make sure the photos look good.
Jill: Absolutely. Again, you could tell me all about your product and it could sell for X amount of dollars, and it could be awesome quality, and I go to your website, and I see the photos, and I'm turned off.