Do you struggle with pricing your product or service?
There is a saying that ‘People look for the cheapest price when there is nothing else on offer’. And that is why I try to get people to not compete on price when starting up their business.
When I talk to people looking to start up their business, or who are in their first couple years of trading, and I ask them why customers will choose them over the competition, so many tell me because they are the cheapest.
And this is when alarms bells start ringing for me. If price is the only thing you can compete on, you will find yourself a busy fool with customers that nobody else wants.
Make sure you charge the right price
If people only bought on price why would we have such a range of cars on the roads at vastly differing prices? A Robin Reliant gets from A to B in exactly the same way as a top of the range BMW. But the BMW has reputation, trust, additional comfort and reliability that people will pay for. Why do some people buy a tee shirt for £9.99 in M&S when they could get an almost identical one in Primark for £1.99? Is it the customer service and better layout of items?
Find something of value to offer in your business and charge the correct rate for your products or services. If you don’t, the competition can quite easily wipe your business out by simply offering a price match or doing a heavy discount for a period of time that you simply can’t match.
Having something of value to make you stand out doesn’t have to be a material item. It can be a small, simple step you have in your business that can make a big difference to the customer that makes them remember you.
Uniqueness and value are perceptions so it could be something as simple as a follow-up phone call to ask if the customer is happy with their purchase. It could be a daily or weekly email (dependent upon what you are selling) as to how their order is progressing. It could be a tiny thing such as including a small length of ribbon and a gift tag if you know your product is being purchased as a present.
Remember, it is the unexpected things that influence us and that we remember. These things will have far more impact on our future buying decisions than having the cheapest price.
So make sure you charge the right price for your products and services and don’t sell yourself short.