Guest blogger and my ingenious former intern, Andy Andrews, emailed me earlier this week with some observations. I asked him to share them with you here.
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When I read this article in the New York Times about college tuition, I had a hunch that my alma mater, Hendrix College, would be featured.
The college selection process
You see, when I was looking at colleges back in 1999-2000, Hendrix stuck out at me immediately. After my first visit, I was very impressed with the students, professors, and campus, but there were two major sticking points for me. Well, they were two sticking points that could be boiled down to one:
I was determined to go to a top-flight, prestigious college, and there were two serious blots on Hendrix’ report card in that respect: location and price.
Now, I grew up in Nashville, so I knew there was absolutely nothing wrong with the South, but when ambitious high school students envision their starts in the world of academia, names like "Cambridge" or "New York" simply roll off the tongue more easily than "Conway, Arkansas."
The bigger, issue, though was the price. Hendrix was something like $17,000 per year at that time, and the other colleges I was looking at were more like $34,000. While I could not figure out any way in which those other colleges were better than Hendrix, since when can you get Cadillac quality for the price of a Chevrolet?
Apparently, many other prospective students had been thinking along the same lines, because after Hendrix hiked tuition, enrollment surged.
How tomatoes are like colleges: Lessons for small business
"But," I can hear small business owners thinking, "what does this have to do with my business?" My reply: "Everything! "
I’ll give you another example–one that has actually confronted me. Now, after growing up in Tennessee and going to college in Arkansas, I live in Germany. While there are many brands with global reach, a great number of the brands in the supermarkets are new to me.
One day I needed three cans of tomatoes for a recipe of Eggplant Parmesan. As I stood in the aisle studying the various offerings, imagining how delighted my guests would be when they dug into this speciality, there were two brands of tomatoes available. One of the brands was a full 50% cheaper. Now, do you think I was going to risk buying cheap tomatoes for my guests to save 2 or 3 euros? Of course not.
Everything communicates!
As Samantha likes to say, "everything communicates," and price communicates very loudly. If you are too much cheaper than your competitors, potential clients might start wondering where you are cutting corners. In contrast, a price positioning close to a competitors’ but with an emphasis on your special touch — whether it be a nice espresso with a haircut or that extra bit of attention — still presents you as offering a good value without the taint of cheapness.
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Andy Andrews is a freelance translator living in Dortmund, Germany.
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