Creative Entrepreneurs and Premium Pricing by @mayachendke

by Maya Chendke | Featured Contributor  

Setting the Scene for Premium Pricing

As an expensive hobby, the horse industry is particularly brand conscious. So when Sarah Hansen set out to build a fashion brand for it, she knew she had to create coveted products at a premium price.

Sarah’s company, Hansen Equestrian, has been taking tack rooms by storm with her stylish and durable equine blankets and rider accessories. Her products feature classic styles with bold prints and practical design that only a true rider would appreciate.

Let’s face it, you can’t ignore a Clydesdale wearing damask.

“The whole concept was to design something that is classy, high-quality and functional,” says the entrepreneur. “There are a lot of items that are one or two of those, but very few that are all three.”

Hansen’s aunt owns a pet bed manufacturing company, and it was excellent training to have that ‘in’ to the world of fashion and manufacturing for doted-upon pets. She recognized that her aunt’s strategy with dog beds could also be applied to equine fashion.

“These beautiful beds would fit into your home décor,” says Hansen, noting that the premium price would itself be part of the branding. She also wanted to manufacture locally in Canada, which meant she was looking at steep pricing battles against less-innovative competitors.

“[My product] would cost more than anything else you could find on the market, so I knew that if it was going to cost more, I needed to make the right choices.”

Armed with $5,000 from an inheritance, Hansen set out to build her brand, methodically and strategically. She measured dozens of horses, examined scores of horse blankets, and developed her keen eye for what she liked, but also, what did not work.

Pricing for Profit, Not Charity

Hansen credits her uncle for the firm advice of not pricing based on what you think a customer will pay, but rather to price based on what things actually cost – and then adding adequate margins. It seems logical, but it’s a hard concept for creative entrepreneurs as there is always a temptation to focus on volume, rather than holding strong to brand principles.

At the premium end of the spectrum, Hansen says the ‘sale’ sticker is suicide. No matter how cute or novel an object, selling anything at a low price or as a loss-leader will bring down the perceived value of everything else.

“As soon as you put something in the bargain bin, you can’t take it back out,” Hansen warns.

She began her business by tapping into customers with smaller, less expensive products like a helmet bag to help introduce people to her manufacturing and production promise. Along the way, also experimented with other products but chose to pull some of them when she realized they didn’t fit her goals (or produce the right results).

As much as creativity and design are critical to a brand, so is the need to be analytical and able to shelve products that aren’t performing.

Scaling

Finding retail partners willing to work with a firm branding principle is also tough, but Hansen is smart about building her direct-to-consumer reputation at trade shows and online.

“It is really exciting to see my products going places that I’d never been,” she says of her reach with ecommerce.

In building up retail partnerships, it’s important to consider alternative options that can protect premium status (such as offering different types of return policies in lieu of discounting). Hansen’s strict branding philosophy is working and her sales are growing in a competitive market.

While Hansen’s dedication to the hustle keeps her non-stop busy between product development, sales, marketing, and events (and a day job to boot), she also makes time to do what inspired this whole business journey in the first place.

“I just want to ride,” she says with a smile.

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Marketing consultant, entrepreneur, writer and horse mom Maya Chendke is going through a powerful start-up year. Her company, mPath Creative Consulting, works on website, marketing, content and social media projects that flex her signature hybrid style of creative/analytical. She is also part of a virtual anti-agency, Horsefly Group, where she leads clients with clever ideas and her color-coded iCal.

Her entrepreneurship track record includes a couple of start-ups and a self-published novel (Awake but Dreaming). A rogue introvert, you’ll spot her at start-up meetings sporting riding breeches and a messy bun as the Woz to her Jobs-like partners (or the Sandberg to their Zuckerbergs).

Maya has an MBA from the Rotman School of Management where she was a standout presence in the male-dominated business school environment. She has a certificate from the Stanford Graduate School of Business Summer Institute for General Management and a Bachelor of Journalism from Ryerson University.

She loves to help people make the most of their marketing budget and has an addiction to analytics. She is always on the lookout for great talent and great projects and loves to facilitate introductions.

In her downtime, she’s diligently rehabilitating her rescue horse and reads ~20 books a year. Tweet her @mayachendke

Maya Chendke