Honesty Box Phenomenom
My pals consider me a bit of a poptart. Despite my advancing years, I firmly believe it’s perfectly acceptable to be into ‘pop’ music. My playlists encompass a broad spectrum, from the heaviest rock, to the smoochiest of divas, but pure pop pleasure is the centre of my aural universe. During the year, the music blogs I surf have been all a-chatter about why so many acts are starting to give their music away for free. It’s been happening via newspaper covermounts, radio-station tie-ins and most recently, the consumer can choose the price they want to pay (the so-called ‘honesty box’ promotion).
The trend is attributed to the monster that is (illegal) free downloading. Depending on which survey you read, for every 1 CD bought, anywhere between 9 and 25 are downloaded for free on file sharing networks. On 5 October, the first person to challenge prosecution for such activity was hit by a jury to the tune of $220k.
To me, music has a value, so I got to reading the more ‘academic’ blogs on the subject. And of several fascinating insights that came from comments on an economist’s blog called Greg Mankiw, one reminded me of the travails I face in solution B2B selling.
From a billion dollar retail boss: “you can’t discount cosmetics or perfume, because what you are selling is hope in a jar and nobody wants [to] discount hope”
When I first started selling, I came across a fella in the business software industry that everyone joked was a cowboy. We’ll call him Larry. He went through a phase that when faced with a severely competitive price war, he’d say to the prospect ‘how about you pay me simply what you think it’s worth?’
And a number of people signed up on that basis. Amazing. I still struggle to understand this. Why Oh Why do all markets where the product is complex and returns abundant, do they inevtiably gravitate towards commodity type price models? The music industry’s response to file sharing and plummeting sales should be to find new models whilst simultaneously increasing the price and therefore perceived value of their product.
And next time I’m in a possible dutch auction, the longer I defend my price, the better. My prospects surely ‘hope’ that I will help them improve in some way, so why diminish the value of such hope?