Years ago, I took over a company that was losing money. For every dollar of revenue generated, the organization was spending three dollars to support it. The problem wasn’t the quality of the product – it was great and world renowned for its concept. Rather, the problem was that the product was essentially being given away and customers were lapping it up. To reverse course, we raised prices – by fifteen times! Detractors said it was a mistake – that we would go “belly up” because customers wouldn’t pay our prices. We put the company on the line because we believed the opposite to be true – that, in fact, genuine customers would be willing to pay the higher prices because the value on the other end was far greater than the prices we were charging. Thankfully, my team and I were right.
In the scenario described, both parties – the seller and the customer – had skin in the game. Beyond simple supply and demand, both parties had something to lose if the product went away. Similarly, if the product line survived, so, too, would the stakeholders. Win – Win.
Creative thinker, Roger von Oech, says that having something at stake – that is, survival, self-esteem, money, reputation, or the like – helps to motivate people to strive for success. Furthermore, if you are willing to put up something important to you as “collateral,” you are signaling your seriousness and intent to see the effort through to completion.
That’s why if you are hosting an event, it’s not a bad idea to charge some sort of entry fee – however large or small – so that interested participants are more likely to sign up AND, more importantly, show up. The difference maker is that they don’t want to lose the funds they expended to register in the first place, even if the fee was very nominal.
What do you have at stake?