Why selling at the lowest price can sometimes be a dangerous strategy
Everyone is so caught up with price these days and it is ridiculous. People arent price shoppers if you educate them. You can charge anything you want to as long as you can convince people you are worth it. Thats not that hard to do. But if you live by price, youll die by price.
What I mean by this is that if you are the cheapest in town, you will probably go out of business. Being the cheapest is terrifying to me. I would never want to be the cheapest. Id much rather explain price once then apologize for inferior service forever. Id much rather see three clients and make $300.00 than ten clients and make the same amount!
Quality. Not quantity.
There are a few big national chains in just about every business category that live on low prices by having a huge turn-over. You are not huge. You cant make up quantity - its just too much work running a small business and there are only so many hours in a day!
- Cheap prices lead to inferior work.
- Inferior work leads to unhappy clients.
- Unhappy clients lead to no repeat business and no referrals.
- Its only a matter of time before the cheapest business goes out of business.
Of course there will always be another business to replace the one that went out of business. Just dont let it be you.
So, heres my advice: RAISE YOUR PRICES
Dont be afraid. Everyone wants to raise their prices but is afraid to. A person only buys on price when they think all other aspects are equal or nearly equal. What I mean by this is that no one would ever buy a Mercedes if they thought the only difference between a Volkswagen and a Mercedes was the price.
To overcome price shopping, you have to educate your prospect so that they realize what they are getting. To a lot of people, all the businesses in your category do the same things. They think they are pretty much offering the same products and level of service. Thats why they price shop.
Why would anyone want to pay more for the same thing? Your job is to convince them that they are not the same. You know this; you just have to convince them. Once you do this, your worries are over.
Let me explain the different between price and value.
Price is what you pay.
Value is what you get.
Everyone wants a good value. They dont want a low price if they get crummy service and inferior products. They want value.
Give them value. And charge them for it.
I never succeeded in my business until I raised our prices and became the most expensive in our area. My business exploded and I got tons of clients because I convinced them that they are getting a great value. And they did! In an industry created on low, low prices, I charged double what most in the industry did. But, I offered the most service and highest quality work in town, and the reason was this: I charged enough so I could afford to be the best.
Dont wait for your client to say that you are too expensive or out of their budget. Its almost always too late at this point.
Like this strategy? My name is Mark Colosi and I have over 119+ more marketing strategies for business owners that I would like to share with you, all for no-cost at: www.newprofitsmarketing.com
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