Tuesday, February 17, 2009

Your pain is not the Customer's pain


I recently have been trying to sell a Belstaff shoulder bag. I bought it when in UK, in pounds. The dollar was weak at the time and so now as I try to sell it, due to my arbitrage, I won't recover what I paid.

In pricing my bag at what I'd paid, rather than what the market was buying, I was confusing my pain with the customer's pain - just because I had overspent, does not mean I can have the customer also overspend. He might be sympathetic to my plight, but won't cover my mistake.

When you sell your product or service, remember you are trying to hit the intersection between the customer need/pain and your desired return. A Rolex does not cost $5000 to make and distribute - but it is bought and sold at that price because it crosses the customer's desire for a swiss watch and the profits they want to get from it.

If you are a retail store, don't be afraid to move out slow selling items - take your hit and move on. Then do a better job next time at choosing products to sell to your market. When Circuit City said it would close its stores, people went there looking for bargains - not finding them, they left (with the stores even slower than before they announced closing).

BTW - I still have the bag!

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