Five Things I Learned About Pricing By Selling Pencils.
I grew up in Saratoga Springs, New York, about 3 blocks from the world famous Thoroughbred Race Track. The area of lived in with my parents and 3 sisters was near what is now called the ‘Clubhouse Gate.’ We just called it the back gate. As in, we couldn’t afford a house near the main gate.
Everyone in our neighborhood tried to make money during the 24 racing days the track was open back then. Today, we would say that people had a ‘side hustle.’ From renting their house out, to renting rooms to track employees who were there for the month, to parking cars on their lawn, everyone had a side hustle, except my Dad.
He worked 2 jobs, and said he didn’t want the hassle that came with making a few bucks by parking cars on his lawn. But that didn’t mean it wasn’t okay for me to make a few bucks.
My first job was selling pencils, on the street near the entrance. I was about 10, and I was cute. So some friends and I decided to sell pencils The standard approach was to get some ‘golf pencils’ and sell them for a nickel. You know the ones, with no eraser. It became clear to me that I needed an edge, a way to make more profit, and differentiate myself from the other kids selling pencils. After all, when 5 kids are selling the same thing for a nickel, how are you going to get the sale? That led to rule #1:
1. Sell Lucky Pencils. . We didn’t sell pencils. We sold “Lucky Pencils” for only a nickel. We were the lucky pencil kids. If you own a business, or sell a product, or are an on-air personality, you need to find and brand your niche. What do you want to be known for to stand out from the crowd? Brand Yourself and Your Product
2. Get Pencils with Erasers. We went to Woolworths, our neighbor was the manager. Instead of buying the same pencils as everyone else, we bought full-size pencils in a box, and used a saw to cut them in half. That way we had pencils with erasers for 10 cents, but could also play in the commodity game with 5 cent no eraser pencils. We also made more profit on each sale, and could discount the golf pencils (3 for a dime) if we needed to. Too many business are in the “me too” game, and can only win on price. Find a way to differentiate your product line.
3. Look for the Ladies in Big Hats. We looked for the ladies in hats. Saratoga is a ‘Lady in a Hat’ track. We learned early on to avoid the gamblers who came every day, smoked the stubby cigars, and had the Racing Form in their hands. But the casual track goer, the Lady in the Hat, thought we were cute, and you could walk the street with her until she bought a pencil or two. Too many businesses today think their target customer is everyone. You need to understand who your ideal customer is. The customer who will buy your products for some reason other than low price. The kind of customer who will come back again and again, and introduce you to their friends. You don’t need everyone, focus your energy on your “Lady in a Hat” customer, and ignore the others. Target the ideal customer and don’t waste much time on the others.
4. I’ve Got Lucky Pencils and a Program Ma’am. One of my neighbors was reputed to occasionally make book. You know, he would tell someone he was ‘going to the track’ and he would take their bet in. Sometimes he just ‘booked’ them himself. He knew everyone at the track. He could get us programs that we could sell. They didn’t have covers on them because they “fell off the truck “ before the covers were put on at the print shop. So we could bundle our a Lucky Pencil, with a program. Our pitch was either cheaper than in the track or the same price, but with an eraser on your pencil. We also saved them time in the track because the program seller booths always had a line. Expand Your Product Line to grow share of wallet. You don’t always need more customers, sometimes you just need more revenue from the same customer.
5. Pick the Double and The Exacta. If you really want to sell something different, sell expertise. People would ask us, ‘who do you like today, kid.’ It was their way of being funny, but we soon realized that we could use that to sell more programs and pencils. So we would tell them,” we’ve already marked up the program with the Daily Double and the 8th race exacta picks for today.” We would talk about how we had picked a big winner yesterday or last week. We weren’t selling programs and pencils, we were selling expertise. Find a way to sell your knowledge with your product and you will always win.
All too often, businesses and sales people wander through life trying to make a sale. By following these simple rules, you can focus your efforts on areas that will pay off, you can differentiate yourself and avoid becoming a commodity. By the way, if you want to go to the track next summer, I’d be happy to give you a tip on The Daily Double, or maybe you could run a bet in for me.