Sunday, March 07, 1999
ENTREPRENEURS
Do research to be sure price right
BY JOHN ECKBERG
The Cincinnati Enquirer
Before he set up his booth for the Fifth Third Bank Cincinnati Home & Garden Show, Richard Nonelle, president of Window Genie, figured he should call around to make sure retailers had the right price for his window cleaner, called Window Genie.
Mr. Nonelle, who created the company in 1994 and began selling franchises three years later, knew he would see thousands of potential customers for his residential window-cleaning service.
He figured he would also sell 30 to 40 cases of window cleaner formula during the nine-day event. Mr. Nonelle was looking forward to seeing the potential customers. It would mean 150 to 200 leads from the steady parade past his booth.
But the price of the window formula — well, that was another matter.
His plan was to sell the cleaner at the show for $3.95 per can, with two of the 19-ounce cans going for $5.
He figured he would also cite the locations where more cans could be purchased. As long as he was going to do that, he might as well call to make sure the cans in the stores were marked correctly. His first call went to a Delhi Township hardware store — one in a chain.
No, we don't have any left, the employee told him. Whoa. That was good news. Sold out! We need some more, the employee said, so can you bring some out? Just out of curiousity, Mr. Nonelle asked, what was the listed price?
Oh, it was $9.95 — six bucks more than the recommended price.
“The guy told me we could charge whatever we wanted to charge,” Mr. Nonelle said. “Mismarked and they still sold every can!”
Setting the price of a product is one of the great challenges for any business: Charge too much and customers pick a rival, usually inches, a dial tone or mouse click away. Charge too little and customers think they are getting a lousy product and turn to the rival.
“We are already higher by at least a dollar,” Mr. Nonelle said. “You wonder at what point do people stop and say, "How much better can it be?'”
When Bill Powell, president of ClearPointe Communications, advises clients on price, he tells them that research is imperative. “You need to do it early, rather than having a product out there at a certain price, and there needs to be ongoing research,” he said.
“The big guys on the consumer side, they are doing research constantly.”
ClearPointe, a company that specializes in business-to-business issues and is based in Montgomery, tells its clients that creating a brand identity with customers involves marketing and advertising support, which may in turn drive up the price.
“But once that brand is known, it's a different story,” he said.
In the end, Mr. Nonelle, a 35-year-old Anderson Township resident, did not change a thing. The old recommended price stayed at $3.95. “Some people would probably spend $20 because they love it so much,” he said. That hardware store did make some changes, though.
The last time he was in, he made a beeline for the cleaner display and saw it was at $4.25 per can. That's higher than the recommended price but probably not high enough to drive away any sales, he figured. Let the store make its two bits.
John Eckberg covers small-business news for The Cincinnati Enquirer. Call him at 768-8386 or e-mail him at jeckberg@enquirer.com.
