Monday, March 15, 2010

Cheap as Chips or Reassuringly Expensive?

Deciding your price can be difficult, especially when you are just starting out or creating new products or services.

It's very tempting to finding out your competitors pricing and just undercut it.

But is that the best policy? Consider these points before you do that.


10-15 years ago their slogan was a very clear 'Stack 'm High and Sell 'm Cheap'. It's taken all those years to modify our perception of them to be targeting the better quality supermarket retailers. It couldn't have been done over night.

They changed their out-of-town outlets to look upmarket and introduced quality brands. They made them better places to be and added 'service' to their offer to change our perceptions.

If we position ourselves as 'cheap' have we got the time, or resources, to take ourselves up in value so that we are working on better margins and become more profitable?

Price Perception

Something that has no charge is often perceived as having no value. The Business Link Workshops I have been delivering have a poor attendance from those who have booked. Is that because they are free, they have no perceived value?

Similarly, if we charge bottom prices does that brand our offer in the same way?


Creating your offer as different from the competition - finding a Unique Selling Proposition (USP) - means you can charge a more realistic price as you are offering something different to your competition, taking price comparison, as a means of customer choice, to a lower priority.

Being different can make a massive difference.

Avoid Selling on Price

Find ways of selling on the benefits of your product or service. Tap into the desires, wants an needs of your potential customers and sell them Solutions rather than features. Everything in you marketing and advertising should represent how they will Feel after they have purchased rather than what it is they are buying.


Some businesses will find this more difficult than others as there are sectors that are really price sensitive such as home electronics. However, if it were all about price only, who would ever buy a B&O sound system instead of a Sanyo or a BMW 5 series rather than a Ford Mondeo?

Need help with your sales and marketing strategy? Call me and just ask.