One Way To Ensure You’re Holding All The Marbles When It Comes To Pricing
- April 26, 2023
- Posted by: Rochelle
- Category: Positioning
I’ve been writing a lot about positioning lately—because it seems to be frustrating for soloists to get right and yet so ridiculously magical when it works.
Today let’s look at this from a different angle: imagine you’re selling a house.
I’ve been immersed in this lately as I’ve been waiting for a tenant to vacate our rental investment property so I can spruce it up for sale.
When I started this process, there were 12 other properties on the market in the same circa-1970’s community (that’s quite a few more than normal).
Concerned about all this competition, I took a detailed look at each listing—and quickly realized that there were three tiers of offerings:
The bottom units looked pretty scraggly. Carpet vs. tiled floors and original kitchens and baths. The photographs showed tired and sometimes even dirty homes.
The middle tier was fresher, but still needed some love. They were clean and bright with perhaps an updated bath or kitchen that was starting to look a bit dated.
And of course, the top tier was the most swanky: fresh kitchens and baths, modern furnishings and beautiful photography.
After analyzing all this, I ranked our unit on the low end of the middle tier. How to push it higher since it would get lost by being stuck in the middle?
It didn’t make sense to renovate to push it into the top tier since prices were soft and we’d have carrying costs to consider.
So my plan was to make it look structurally better than any of the lowest middle tier and stage the heck out of it to get the highest price possible.
And while I was doing that, an interesting thing happened: all the existing units went under contract.
So our property is now the ONLY ONE available in a highly desirable community and location.
Assuming this is still true in the few days left till we list, what does that mean?
It means that we could price at the highest tier. No other options means that we have all the marbles.
Now that’s not really practical with real estate because banks get nervous with a purchase price that seems out of whack with recent sales (although it still bodes very well for us).
But if we were talking about selling expertise instead—where we’re talking transformations worth thousands or millions or tens of millions of dollars?
You could position and price yourself anywhere you wanted.
Because when you are the ONLY ONE delivering a particular high value outcome, the marbles are all in your pocket.
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