Based in Washington, Ross is a general manager of a food safety company. His musings explore life, work and every moment in between.

Perceived Value

My neighbors put out an old used fridge on the sidewalk with a sign that said “free”. After a few days it was still there. They tried a new tactic. They made a new sign that said, “For Sale: Used Fridge, $100.” In the middle of the night someone stole it.

There is perceived value in things that are priced accordingly. When Stephan Marbury came out with a basketball shoe that cost only $14.98/pair (the Starbury 1), the world decided that it was too inexpensive compared to the $150 shoes it was competing against. Nobody gave it a chance. The shoe got off to a slow start because it was priced too low and it took a while for skeptical consumers to come around. A similar thing happens across all other industries. Giving away a product or a feature for free carries very little value for consumers. In fact, consumers know that if you are willing to give a feature away for free, you are likely willing to give away other features. The value of your product or service begins to degrade towards zero.

Make sure to stand firm on your pricing. It is better to walk away from a bad deal than to discount, underprice, or give away your product or service. Even “free” was too expensive for thieves in my neighborhood.

Sales is about relentless efficiency. Velocity matters.

Leadership by Imitation