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.

Tesco

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?

USP

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.

Conclusion

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.

Don't Compete on Price

If you are going to sell the same product or service as everyone else, sold in the same way and in the the same street too, then there is only one thing that differentiates you from your competitors - Price!

I don't know about you but I don't just want to be competing on price. That's reduced margins and a constant price war between you and your competitors to be the cheapest.

So how do you get away from price?

1. Don't sell the same product or service in the same way as everyone else.

Don't sell the 'same'! Find a way to re-package or add value to make your offer different. Seek out you customers and work out what they are really looking for when they buy from you. Tap into their desires and needs. Sell not just a product or service but an outcome.

Look for things that go with your product and bundle them in with a different price tag. Make yourself an advice and expert centre.

Do anything that steps you above your competitors and makes the price just one part of the buying decision rather than the only buying decision.

2. Don't sell in the same place.

Look for somewhere 'different' to sell. Size up your competitors and where their main selling and advertising focus sits.

Working out your customers real requirements will help you understand the problems they have and solutions they need which drive them to look for your products and services. Look for times and places that these may appear.

Work out what they may be asking or looking for - it may be different to how you would traditionally have thought. Then find ways of 'being there' at the right time.

This is all about finding your own Unique Selling Proposition or USP.

Without it you'll be selling on price and ever-reducing margins.

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