E97 Transcript
Today we’re unpacking the second of four pricing traps that get in our way when it comes time to put a number on the tag. Last time we talked about the avoidance trap. Today we’re talking about fear. Fear about whether it's the right number. Fear of what people will think. Fear of not selling anything.
Fear by itself is bad enough, but it's especially dicey because it can be the thing that underpins the other traps. Fear can ride underneath Avoidance. Fear can ride underneath Identity.
So today we're going to look at fear directly and talk about the personalities inside of the fear trap. Afraid I might be talking to you? Stay tuned. Let's find out.
Let's start with what fear looks like. This maker does the math. They know the number. And then the number somehow moves because of someone's reaction. Either a reaction that’s already happened, or one they expect might happen. It's the fear of what the other person might do.
What sets it off? A customer's face. A comparison to a competitor. An unsold item at closing time. Friends and family who you think will expect a discount. Any one of those can do it.
Remember the declaration and the exposure from episode 95? With avoidance, nobody else is in the room yet. With fear, someone is. Even if that someone only exists in your head.
Compare that to last time. With avoidance, the number was the scary part. With fear, the reaction to the number is the scary part.
Now here's something I want to mention before we get into the personalities. The five personalities inside fear fall into two groups. Reactive and anticipatory. Reactive is exactly what it sounds like. You react to something that is happening. Anticipatory is a little different. To anticipate something is to think you see it coming. The reaction happens BEFORE anything has happened.
Reactive fear shows up in the moment. Someone is standing there, or another maker's table is right next to yours, and the price gives way on the spot. Picture the buyer who looks at the tag and pauses, or maybe even has a look about them, or might flat out ask why it costs what it does. The impulse is to backtrack, to apologize, or to lower the price right then, just to ease the tension. This is happening in real time.
Anticipatory fear happens before anyone has said a word. Nothing’s happened yet. The price moves ahead of the reaction, based on what you think is going to happen. You’re afraid that if you price it at the real number, nobody will buy, or someone will say something, or you’ll feel like a fraud or be exposed. So, the price comes down first.
Why does the split matter? Because the fix is different. The reactive maker needs something prepared for the moment. Something they can remember and use on the spot in real time. The anticipatory maker has already made a decision, but fear made it for them. So the fix is to revisit the decision, on purpose, using the real number, and find a way to out smart fear.
So let’s look at the five personalities.
Our first fear personality is the Reducer.
The Reducer is reactive.
A customer pushes back, or just hesitates, and the Reducer is already working out the discount. Sometimes only in their head. Sometimes out loud. But always because they're reacting to a fear they have.
You may have seen this one, or done it. The person who hands over a card and says, "Call me after the show. If it's still available, we can work something out." The sale hasn't even been lost yet, and a possible deal is already on the table.
All of a sudden we start rationalizing. The economy. The time of year. The look on that person's face. We think we feel a vibe in the comment “Oh, that's pretty,” but no purchase. Must be because they saw the price tag.
Pushback feels like proof the number was wrong. A face gets treated like an answer. And the cost is that one person's reaction sets the price, and the real math never gets used.
Now, a discount you decided on ahead of time, and can explain, is a business decision. The problem is the one made at the table while you're flinching.
So here's the fix. Decide your price before you're in front of anyone, and write it down on the tag. Then have one calm, prepared answer ready for pushback, so you're not making it up on the fly. You're still going to care what people think. That's fine. Just don't let their reaction set your price on the spot, every single time.
Rarely will anyone say anything rude to your face. But there is sometimes the implied thing. Someone says, "Oh, I saw something similar at, insert your favorite big box store here, and it was only X dollars."
I always have the answer ready. Yes, there are a lot of places to buy mass market items made in factories overseas. My work is handmade, with careful consideration to design. Design and fabrics you won't likely find in those stores. I understand that many people do prefer a more mainstream piece, but my work is not for everyone.
And to the question, "Can you do any better?" my answer is, "No, unfortunately. With handcrafted pieces that are one of a kind, that is the cost." The only time I might lower the price is for a quantity, and that quantity is decided in advance. Not all people are your people, and that's okay.
Next is the follower.
The Follower is also being reactive, but to a different trigger.
This maker stays inside a tight band of what everyone else charges. "I don't want to be the cheapest, but I can't be the most expensive either." I have literally seen artists set up for a show with no prices, walk around and look at what everyone else has done, then go back and stick on price tags based on what they saw.
It shows up in other places too. Undercharging at an event because other makers are standing right there. Checking what everyone nearby charges and making adjustments before customers arrive.
According to an Etsy Community forum, this is a common issue. One seller said that low prices from others "make the rest of us pricing accordingly look like money grubbers."
Standing out in either direction feels like exposure. So, in an effort to blend in, you simply fit into the range. Then no one can say anything about your pricing. And if you do hear comments about things being expensive, you don't feel bad. They're talking about everyone, not just you.
The trouble is, that price comes from people who don't know your time and your costs, or maybe don't even use the same materials you use. And their numbers may have come from the same fear. A band of prices nobody checked.
Now, knowing what the market looks like is useful information. In fact, you should know what the market looks like and what it will bear. The problem is when that's the only input, when it determines the price, and the cost of things doesn't.
So know your own number first. Then look around. The market tells you where you sit. It shouldn't be the thing that sets your number. And when you do look around, take into consideration the quality of the other makers, the design aesthetic, and any other non-money attributes of your items versus theirs. Those count too.
Everything so far happens when someone else is present. The next three happen before anyone has said a word.
What comes next is anticipatory fear. The fear that is all about what people might say, think, or do. Nothing has happened yet, so this one is essential to get a handle on. Don't count yourself out before you've had a chance to see what happens.
Our first anticipatory personality is the Insider.
The Insider gives a discount automatically to anyone close to them, before anyone asks. Friends, family, neighbors. Sometimes repeat customers too, because it feels guilty to charge them full price. I think of it as a preemptive strike. Hand over the discount first, so nobody has the chance to say – Hey, I thought since we knew each other…
And here's what gets me. Of all the people in your circle, your friends and family should be the ones who know how hard you work, and should be willing to pay full price.
We all do it, and it seems to be widely accepted that there's a friends and family discount. I'm not saying that's bad. I'm not saying don't do it. I AM saying - make sure it's intentional, and make sure you've built in enough profit to do it. Don't do it just because it's expected. Plan appropriately for it, if you're going to offer it.
What's driving it is, what will they think? What will they say about me? The concern comes from outside the maker. It's about the relationship and the reaction.
If this sounds familiar, it's because the One-Man Show from last time gave friends and family discounts too. But the reason is different. The One-Man Show discounts because of what they think they deserve. It’s about worth. That decision comes from the inside. The Insider discounts because of what other people might think. That decision comes from the outside. Often the Insider charges strangers the right number, which tells you the number was never the problem.
The cost is that the discount goes to people who may well have paid full price, and the maker never finds out. A friends and family price you picked on purpose, at a level you can afford, is a choice. The automatic version, decided at the register by guilt, is the problem.
So decide ahead of time whether there is a close-circle price at all. How much it is. And who gets it, specifically. Then it's a policy, instead of a decision you make in front of someone you care about.
One word of advice. Do not advertise that you have this. It is for you to know who falls into this category. And anyone who gets it should be told it is confidential. Be very clear. I have had instances where I had to do away with the close friends discount because someone abused it and broadcast it, and then I was expected to explain why this friend got one and that one didn't. After that, there was no friends and family discount, and I was very clear it was because it had become an expectation and a form of coercion.
Our next anticipatory personality is the Someday.
The Someday knows the price is too low, and plans to raise it eventually - once they're more established, more confident, more known. This goes back to worth and mindset, and feeling like you deserve it. It's the "not enough yet" mindset. The raise in price keeps getting pushed back because there's no point where it's officially time.
The fix never arrives, because no real event triggers it. It's waiting on a mental shift that only you can make happen, on purpose.
Raising the price is a declaration. Of worth, of deserving, of finally making it. Waiting puts it off. It also puts off the reaction from people who bought at the old price. And it puts off having to experience any pushback.
Meanwhile, every sale is at a price they already know is too low. The waiting has a cost, and you can easily calculate it.
Don't confuse the Someday with the Ostrich. The Ostrich doesn't know the number. The Someday knows it exactly, but doesn't feel like now is the time yet. It's almost anticipating the day, and yet making sure it never comes.
Now, a planned raise, with a date, say - at the start of next season, is a decision. So choose the trigger yourself and write it down. A date, a number of sales, a specific event. Then raise the price when it arrives.
I do this almost every year, or at the very least, I look at a number of factors. Recently I raised all of my prices, because I am a business. And in order to keep it going, I have to make sure the incoming finances cover the outgoing. It’s a fact of life. A review happens once or twice a year, to make sure all of my overhead estimates are still in line, or that thread and fusing didn't suddenly double in price. If I notice things have changed anywhere, I set a planned shift, like between collections or between seasons. And definitely between shows.
Now our last anticipatory personality is the Clearance Rack.
The Clearance Rack marks things down at the end of a show or a season, out of panic about the unsold pieces. "Something might sell now" feels automatically better than "nothing has sold yet."
The thing is, nobody checks whether that's actually true. What does the markdown do to the labor on that piece? Would it sell at full price at the next event?
The thought underneath is, "If the retailers do it, maybe I'm supposed to do it too."
Here's where my years in the industry come in. Yes, retailers plan markdowns in advance, as a percentage of each season's planned sales. But they need to clear out floor space for an entirely new floor set the next season. We don’t. And because they're mass marketers, they're buying for the majority of buyers. They know for sure they will not sell all the merchandise at full price. So they have a formula for how much the first few weeks of sell-through needs to bring in, to cover the margin for the whole buy. Then, when they take a smaller margin at the end of the season, they've already made the total margin. Now the final few sales are just icing on the cake.
Why does the Clearance Rack sit in the anticipatory group? Because it’s the fear of being stuck with unsold work, and that hasn't happened yet. And in handmade, we don't necessarily have the huge seasonal turnover that mass retailers do. What's left over from this event will be just as valid at the next one, or even next year.
Have I ever marked things down? You bet. When I'm tired of looking at it, or I no longer want to do that particular item anymore. Or I'm moving in another direction. Often the items I no longer want in my assortment become gifts. The shows I participate in are small enough that I really don’t want discounted merchandise mixed in with the new collections. So, a piece leftover from a collection becomes the next show donation for their silent auction. And I have been successful so far in not training my buyers to expect anything marked down at shows or on my site.
A clearance you planned ahead of time, with a floor price you set before the show, is a business decision. So decide before the show how low you would go on each piece, or whether you mark down at all. And decide what you would rather carry to the next event.
So there are the five people who get caught in the fear trap. The Reducer, the Follower, the Insider, the Someday, and the Clearance Rack. Can you get caught in more than one? Yes, of course. But...
All five come down to the same thing. A reaction, real or imagined, gets to the number before you do. Different shapes, same move.
These are people who did the math and then thought they needed to protect something else. The sale. The relationship. The comfort of fitting in. The promise for later. Nothing dishonest is going on here. No carelessness either. Just fear.
Now, in episode 96 I said fear can ride underneath avoidance. Here's how. Some people stop looking at the number because acting on it means facing someone's reaction. The Ostrich who looked once, got an uncomfortable number, and never did the math again? Some of them stopped because they could picture the reaction to that number.
Fear can ride underneath some of our future traps as well.
But for today, the cost across all five Fear personalities is the same. The margin leaks out a little at a time. Each discount feels small. $5 here and there doesn't seem like much. But $5 over just 20 sales is $100 given away. Add them up over a year and it's real money.
Our fix is the same as last time, with a new twist. Decide the price on purpose, before you're standing there. If you're going to discount, build it in ahead of time, so you can afford to. Then any change you make is a choice. Discounting on purpose is a choice. Discounting in the moment is a reaction.
Don’t get me wrong, fear is understandable, because it involves other people. It happens to all of us. But fear gets a voice, not a vote. The trick is to not let it make the decisions. It's best used as a compass. It lets you know something wants your attention.
The fix is to know your numbers, decide ahead of time what you're going to do with them, plan ahead for any resistance, and have your answer ready. If you want to offer discounts, plan for those ahead as well. Build those decisions into your pricing strategy. That's it.
Next week, we’re talking about the ‘No Anchor’ trap. This maker never had a number to start with. So what exactly are they flinching at? Meet me back here next week to find out.
