Yesterday we talked about the balancing act between the prices we charge for our handmade products and the value that our customers perceive in our products.
Perceived value is tricky — it’s different for different customers. For example, the value I perceive in a handmade quilt is different from the value my brother perceives in a handmade quilt. One of us could justify spending $300; one of us would rather go to Target.
So, savvy business people that we are, we want to do the whole Marketing thing to find those special people who value our craft as much as we do.
We brainstorm our benefits and feature, and define our competitive edge.
We analyze our costs, we pay ourselves a living wage, and we formulate a price.
And then (and why is it only then?) we look for a target market who is willing and able to pay the price for our passionately-made products.
Isn’t that backwards?
Why is pricing the last step? Why do we create a new thingie, saying “Oh hey, that would be cute!”, without pausing to consider if consumers have a need for our new thingie? Or big enough wallets to pay for our new thingie?
So, what if we work in the opposite direction? What if we used price as a starting point for product development?
Start with the price that your ideal customer is able to pay, and then engineer a product to be profitable at this price.
Do any of you do this already?
I have a potter friend who does. She makes beautiful ceramic pieces: platters, mugs, bowls, pitchers — you name it. And she is particularly well-known for her elaborate, and highly involved, glazing techniques. Needless to say, the prices of her larger pieces reflect her level of involvement and expertise.
But when she attends craft shows, she takes a different approach to her work. Throughout her years of experience, she has found that casual craft show shoppers are looking to make $25 purchases. In other words, they are looking for mugs.
So she finds ways to make mugs more efficiently. She throws simpler shapes. She works in larger batches to cut down on production time. She uses fewer glazes, and less complicated application techniques. And you know what, sometimes she even skips attaching handles. (Handles take a lot of time, you know!)
As a result — she can produce mugs in a shorter amount of time. She can sell them at a lower price that, while still fair to her, is agreeable to her customers.
Now, her goal is not to be the cheapest. She’s not trying to cut corners and cheat her customers. She just wants to make something beautiful that casual shoppers can afford to buy.
Are her mugs still high quality? Absolutely. Are they still beautiful? You better believe it. Are they still a good value? Incredibly.
A Creative Challenge
Would you ever consider using price as a starting point when developing new products? It’s sure to be a creative challenge!
You probably wouldn’t use this production strategy all the time. But you might use it if you were looking to appeal to a different customer base, or perhaps land a wholesale account.
Can you produce a quality product that your customers can afford to pay for? Can you create a marketable product while not compromising your artistic merit? Can you hold the quality standard high, while making your products affordable?