Monthly Archives: April 2003

Moving house

Ok, I will be honest, I haven’t got a clue what I am going to write about in this issue! I moved house at the weekend and spent most of last week packing and most of this week unpacking.  I am still surrounded by boxes as I write this, but you notice I got the most important thing unpacked first – my computer!

Although I managed to do all of the packing myself, I did hire a couple of guys to do the actual move. The removal guys turned up at 7am, spent 3 hours loading my stuff into their lorry, then drove 200 miles to my new house, spent another couple of hours unloading and then got back in the lorry and drove 200 miles back home. They both worked very hard and I would guess that they were both exhausted at the end of it. Now, for me, that was the end of the move, but they had to get up the next morning and do the same thing all over again for someone else.

Now, the reason that I am telling you this is that it occurred to me that whilst the two guys above did earn a decent wage for moving my furniture etc, it took a long time and it was extremely hard work. I certainly wouldn’t fancy doing it everyday. And you know what? One of those guys didn’t fancy it much either!

During a quick ‘tea break’, he asked what I did for a living and we got talking about the Internet. I told him about eBay.com – a website he had never heard of – and he told me that often when people move house, they end up with boxes of odds and ends that they don’t really want and sometimes they offer them to him. Turns out he has a garage full of stuff that people have given him over the years and he has always intended to sell it at some point, but never got around to doing so. Of course, eBay is the ideal place to sell the majority of this stuff – even some of the larger bits of furniture – the guy travels up and down the country every week in a huge van so he could easily deliver if necessary.

So although he was absolutely exhausted, he went home a very happy and excited chap. I am sure he will be making a start on clearing out that garage this weekend and the Internet could turn into a very lucrative sideline business for him. It just goes to show that you don’t know what your Internet opportunity might be – my removal guy certainly didn’t think he would be going home with a new business idea.

My apologies that I didn’t prepare anything more meaningful to write about this week, but I don’t intend moving house ever again, so this should be the first and last time this happens.

Perceived Value vs True Value

Anyone who has spent any time trying to learn about Internet marketing will have heard of the technique of increasing the ‘perceived value of your product’.  In plain English, this means making your product look more valuable than it actually is on your sales page, ie before your customers have purchased it.

The main ways to do this are to increase the price (people are expected to assume that a $20 product will be better than a $10 product) or offer lots of ‘bonus’ items to anyone that buys your main product.

I have never been a great believer in the perceived value argument – sure, having a great sales page may get more people to buy, but if the product doesn’t match the hype, then all that is going to happen is that you will receive a string of complaints.

In addition, I have tested pricing on several of my products and in my experience I have seen no evidence that a $27 product will sell more than the same product priced at $10 (despite what the ‘experts’ will have you believe).

I have always tried to offer ‘true’ value to my customers, not perceived value because it is true value that is important.  I thought I must be the only Internet Marketer that thought this way, but I was reading an eBook by a guy called Stephen Pierce this week and he agrees with me.

(For those of you that have never heard of Stephen, he runs several successful websites and pulls in something like $50,000 A MONTH online!)

Many online marketers go for the ‘quick kill’ and charge you a high price for their product.  Many people buy the product, but if the product is poor quality, will they buy again?  Unlikely.

Now consider the reverse scenario, a customer buys a product that appears to offer great value. When they receive the product, it actually offers absolutely superb value and in fact, it is a fraction of the cost of similar competitor products!  Instantly you have a happy and loyal customer, so when you launch a new product or make a recommendation are they going to buy from you?  Well there is a very good chance that they will (stats show that on average 30% of sales come from previous customers – but only if you offer true value on their first purchase!).

I remember a saying that used to get thrown around the office when I worked in Corporate Finance – ‘It is much easier to retain an existing customer than to find a brand new one’. This is 100% true in Internet Marketing as well.

If you knew that you could sell to 30% or even 40% of your previous customers, doesn’t that make your job a lot easier?

The only way to do this is to offer TRUE value and not PERCEIVED value.