Have you ever awaited eagerly the release of a new product you want to buy, and become disappointed when it was available?
This can occur because you may not think there are enough features packed in to justify the price.
However, recently, I was disappointed because there were too many extras built in that I knew I was not going to use.
I just wanted the base product, not the education, advice, seminars etc that were loaded into the deal.
For some reason I felt these extras were just there to justify the price. Okay that is not rational but an emotive response which after all is why we buy different brands.
In the past I have written about the marketing benefits of adding optional extras and this can be an advantage.
The key here is optional, not mandatory.
Now offering a base model will not apply to all of you and your products or services. However if you think it might here are some things to consider:
Volume
Businesses that offer these know they are going for volume. This means you need to make sure there are enough customers who want this type of product and service.
The volume can come from an ever increasing number of customers or customers who will buy on a regular basis.
For example take the guy who cuts your lawn. He offer the base model of mowing because he know there are enough who want it and that lawns keep growing so there is continual demand. If you want him to maintain your garden there is an extra charge.
Basic needs
If you are looking at a base model for your products or services then it needs to meet the fundamental need that is the minimum for customers to accept it.
An example could be a bookkeeper who makes sure your accounts are up to date, invoices sent and payments made. Another example is your local car wash. The base model is your car will be washed and rinsed but not waxed.
Pricing
As well as volume you need to make sure you price your base model to make a margin on every sale and not at what it costs you to produce. Otherwise it is not profitable to offer it.
Also you do need to compare the price between the base and the other products or services that you offer so the difference is quite clear to your customers.
Costs
If you are looking at offering a base model then you want to be able to produce the product or service at a lower cost than your other products or services.
To do this you may want to consider how you deliver your product or services to your customers. For example if you offer a service it might be via email only and no face to face meetings.
As I mentioned before this isn’t viable for every business, however if you take a little time and consider this you might just bring in more sales for your business.
Do you have any other things we should consider?
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Hi Susan!
I enjoyed this post because it made me laugh at myself. I’m a big time BASE MODEL consumer when it comes to cell phones. It’s funny because the sales guys can’t figure it out. They are always pushing my “free” upgrades, and fancy phone options, but I always say “just gimme a phone that dials and I’m fine.” I think it’s mostly resistance to learning something new, but mostly I just want what I NEED.
Sometimes I think as marketers we can go wrong by trying to offer people what WE think they need instead of what THEY think they need. Just another reminder to know your customer above all.
Hi Marlee,
I can imagine the looks you must get from the sales guys. You are right about some marketers offer what they think customers need. It does take time to understand customers but it always pays off in the long run. One problem I see is some small businesses have trouble interpreting what they say to see how it fits into what you offer. This does get easier with experience don’t you think?
Hi Alex,
Good point about which side you are on as customers can see it quite differently to businesses. It isn’t suitable for all and also it is how the extras are packaged up. Car manufacturers have done this pretty well and it leaves the customers feel they are in control of their purchase I think.
Hello Susan,
Buying only the base model can be a two way sword. First you can save the money but you might have to pay more because you will increase the rate at which you will contract that service.
But I am thinking of buying a car, and if I would go for the base model I am pretty sure that I might have to pay way more money to add the features that I want myself.
So, the base model is only profitable for certain products (of course this also depends on what side are you on, the buyer or the seller)
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