I hate to break some Realtor's chips... but for many of you the belief you have, regarding the role pricing plays in real estate sales, is not cracked up to what it could be. Believe it or not there is a simple yet profound parallel lesson that can be learned from how Lay's potato chips are packaged, priced, marketed and sold and how real estate is packaged, priced, marketed and sold.
Let me be clear... when it comes to selling anything, be it real estate or potatoe chips, Price IS King. It is a fact that the seller (market) will only get the price the buyer (market) is willing to pay... that makes price "KING". But I think that too many Realtors have collapsed the concept of "KING" down to mean it is the ONLY thing that matters when it comes to selling real estate. They don't understand the full ramifications of HOW pricing is but one factor managed and integrated into the overall real estate marketing and selling process.
So let's crunch on the pricing lesson to be learned from the potato chip...
Yesterday I saw a compelling news segment on CBS Sunday Morning. In the piece the correspondent reported on the dynamic, and well-regulated world of food labels. Intererviewed for the segment was the Product Manager at FritoLay who is responsible for marketing their "natural" potato chip product. While we all know that Classic Lay's Potato Chips (Bet'cha can't eat just one!) have been a snack "staple" for years, FritoLay knows consumer tastes change. Because markets and tastes change, FritoLay ongoingly develops new potato chip products.
Surprisingly on camera, the FritoLay's marketing manger shared a little "secret" about one of those newer products they sell... the Natural Potato Chip. She confessed that basically Lay's Natural Chips are exactly same product as the Classic Chips. BOTH, nutritionally the same product, are made using the same type of potato and cooked in the same way. The only real difference in the two is that the "natural" chips are salted with sea salt, a salt PERCEIVED to be more natural, are cut thicker and are put in bag that is earth tone in color and has a matte (paper bag like) finish. Classic Chips go into a shiny yellow and red bag.
Ok, so what! The chips are the same. What's the point?
Well... there is one major difference between Natural and Classic chips. FritoLay admitted that they put LESS chips in the Natural Chip bag AND the charge MORE for them. That's right, less product for MORE money. How could they get away with this if PRICE IS KING? Well, FritoLay's knows that buyers buy what they want...in this case what the want "natural" chips. Buyers do not perceive Classic Chips as natural... even though they really are. If they want to sell chips to the "natural" buyer, they have to sell a product that is viewed as "natural." The packaging then becomes essential in driving home the "natural" point.
So even though these chips are basically the same, because the potato chips are packaged in a way that buyers relate to them... they buy them. FritoLay knows that buyers buy products, as simple as potato chips, when they connect to it.
Or said another way... even though homes are often the same, when homes are packaged (staged) in a way that buyers relate to them... they buy them. Stagers know that buyers buy products, as COMPLEX as a home, when they can connect to it. A stager's job is to package the chips (homes) in a way that the buyer will relate to. THAT is what staging is all about.
So, while it is important for a listing to be priced right, if as a Realtor you are not considering or have not looked into working with a home stager in your area, because you believe in the myth that "Price is King," then in my opinion you are relagating yourself to be a Real Estate Couch Potato.
Chip It Forward...
PS: 2 of my past posts, originally posted and "featured" here on Active Rain, describe the importance price plays in selling a home, and to this day are still quite popular and downloaded on a regular basis. If you are interested, check out: