I’ve worked with hundreds of business owners asking them, “what makes customers choose you over your competition?”. I am surprised at how often I hear, “price”. If you’re still competing on price, you’re shorting yourself and here’s why:
- Customers will only shop on price if they have no other way to differentiate you from your competition. That’s right, unless we give customers a valid reason to choose us – no matter what our rates our – they will defer to price. Why? Because they have no other way of knowing why they should choose you. So as small business owners and marketers, it is our responsibility to demonstrate WHY we are the best choice and HOW we offer the best value for their money.
- What do your cheap prices say about your business? Who wants to be the cheapest service or have the cheapest product in town? What does that say about your quality? We’ve all heard, “you get what you pay for” and most consumers who value quality will automatically NOT choose you if you’re too cheap.
- You can’t grow a sustainable business only working with clients who value “cheap”. Wouldn’t you rather work for clients who focus on value rather than price? Those shoppers seeking deals, are rarely our most profitable and often the most difficult to work with, aren’t they? If you can move away from competing on price and effectively convey your value to the right audience, you can begin attracting the types of clients you’d like to work with and being growing a more profitable business.
- You’re limiting your profits (i.e.: your paycheck). Increasing your prices by just 5 or 10 percent can have a huge impact on your bottom line – and especially on your profits. Many business owners fear that if they raise their prices, they’ll lose customers. But think about the customers you’d lose, are they your best customers? Probably not, so if you get an extra 10% of your best customers and lose the 1% who are probably the ones with the lowest profit margins, anyway you’re still better off.
The bottom line is competing on price is an ineffective and dangerous way to run a business. Do the market research, learn what motivates your customers to buy from you, stay with you and refer you. Study your competition and find a way to stand out from the crowd so you can feel confident in charging what your worth and getting it!
If you need help in this area, working with a Marketing Consultant is an excellent way to build your marketing foundation and learn to get paid what your worth. Fortune marketing is happy to help, contact us for a consultation!