We recently had a discussion in the Dean’s Advisory Council (DAC) about the idea of raising our prices over the next ten years to generate more revenue. I raised the idea with the DAC as one potential component of a larger strategy to offset likely reductions in state funding over that period. Of course we also need to think about ways to increase our private fundraising and to reduce our costs.
Some DAC members expressed concern that local governments may not be able to absorb more increases. We have raised prices over the last few years to counteract budget cuts, and luckily it hasn’t reduced course registrations or publication sales. But will it be possible to continue increasing our prices over the next ten years? I don’t know the answer to that question, and I take to heart the reactions of my colleagues on the DAC.
If we decide to raise prices, and certainly if we hope to increase our private funding, we must convince people that the School is a great investment. How? A post called “If You Want to Raise Prices, Tell a Better Story” on the Harvard Business Review blog suggests part of the answer. People are willing to pay more if there is a great story associated with a product. “In a world of abundance, what your product does for your customers is important, but not nearly as important as what your product means to them. And this second part—the story of your product—is what yields the greatest pricing power of all.”
The post describes an experiment in which inexpensive objects with little intrinsic worth—like a cracked ceramic horse—rose dramatically in value (2,700% on average) on eBay when accompanied by a story that placed them in a human context. “A shoe is a shoe is a shoe until it is a pair of TOMS shoes.” The value changes once you realize that your purchase also gives a new pair of shoes to a poor child. “Suddenly, these objects are part of an inspiring narrative—one that that [reveals] something meaningful about myself to others.”
How is this idea relevant to the School given the many differences between our products and the products of a private business? Our classes, publications, and advising do have intrinsic worth for public officials. Even when products have a recognized value, however, the value may be increased because of “the story or the meaning that the objects represent to the owner.”
Can we connect our work to a narrative that officials and prospective donors find inspiring? In addition to the practical benefit of our services, can we place our work in a larger context that has an impact beyond the education of individual officials? Many public officials have incredible affection for the School. Can we describe our relationship in a way that makes it even more meaningful for North Carolina officials? I am not suggesting that we make up a story that isn’t true. I wonder if we can craft a story about our relationship with public officials that strengthens that relationship, and that convinces them to invest even more local funding to replace disappearing state money.
The School does a better job than ever of marketing our services, and it has been important as local governments have had to choose whether to invest their scarce resources in our training and publications. We have hired a terrific group of professionals and they have improved our marketing and expanded its reach. It may be necessary to place our work in a larger context, a more inspiring context, to continue increasing our revenue and to convince individual and corporate donors to invest in the School. It will be especially true for individuals, companies, and foundations who don’t have an existing relationship with us. Our marketing team will be important, but all of us will need to be involved. I look forward to working with everyone in crafting an even better story that enhances our value. What is that story?