Advisability of a cheaper model

[Craig Bumgarner]

Should I consider making an "el cheapo" model or will this just dilute my brand?

My guitars have gotten better over the years and I keep adding high end features, but the cost goes up too and I seem to be hitting a ceiling in what I can charge and still move guitars. I can't really afford to roll back the prices, so I'm considering a cheaper model without of the high end touches and a lesser finish. The sound will be just as good. I'm sure I could sell more guitars this way, but am concerned how it might affect my reputation. I can make the argument either way, so I wonder if others have done it and what their experience is.

[Nate Scott]

Speaking as a consumer (not as builder; I'm still far from anything like steady sales), I think it's great when brands I like offer basic/standard/deluxe options of equal build quality. It helps clarify the relative value of the fancier features and makes it easier to match what I want to what I'm willing to pay. To me it shows a respect for the customer.

I think in the case of guitars it's particularly great to offer a "player's model" that's geared toward working musicians who may or may not care as much about inlays as they do about tone. I also wouldn't be surprised if given a choice between basic and deluxe, most people upsell themselves to deluxe anyway.

Another variant I've seen a lot with builders is to offer a base model price and a full menu of upgrades (premium wood +$200, bound FB +$50, etc).

[Michael Lewis]

Your work (product) is your reputation, so if you have a reputation of making higher end instruments and then offer an 'entry level' instrument you may run into some dilution of your higher end sales. An aweful lot depends on your personal approach to your work and marketing. Get your calculator out and start running numbers. Do you want to do production runs of less fancy guitars or make fewer higher end guitars? Kinda depends on what you can sell.

[Perry Ormsby]

What will be the outcome? You'll be fighting for low end sales with everyone else who fights for low end sales. You know, the market that has no profit margins...

Unless you are AT CAPACITY with the high end stuff, NEVER offer a product that dilutes that. When you do, it has to be totally different, and made in a way that is more profitable that the high end stuff. Eg: outsourced. The high end stuff then creates the dream (OMG!! I want that!!). The low end provides the cashflow (I want the expensive one, but I can only afford the cheapy).

Would you rather be paid $4000 for one guitar, or $2000 each for two? The $4000 guitar doesnt have twice the labour...

Personally, I AM at capacity with my high end stuff ($4,500-11,000 with $15,000 guitars coming). Ive let it be at capacity for three years (by that I mean you cannot simply order a guitar, you have to wait until Im ready, AND I feel like building what you want). Only now am I introducing a $1,600 model to fill that lower end that simply cannot afford my hand made guitars. They will, for the most part, never upgrade (a few will), but they WANT and NEED something they can afford. They want to be part of the brand.

If you start with your lower end pricing, it is very difficult to raise up and up. Existing clients have that pricing already burnt into their minds.