If you’ve been in business for any longer than a week, you will have had the feeling (at least at some point and maybe quite often), that the lowest price seem to win all the time? Do you feel that your regularly competing on price?
You might feel like you have a better product or service than your competition, that you’re more professional, you’re more reliable and lots of other reasons – yet you still have to compete on price with them?
There are a few reasons why this happens. But chief among the reasons is that you haven’t give your customers enough information to show that you are different.
Okay, now I can hear you say that I’m full of bs.. and that’s kinda understandable. I know. I’ve been there before and actually had the t-shirts printed!!
But here’s the thing. Lowest price does not always win the day. People might tell you that they don’t have any money. They’ll tell you that, but go into their homes. Even in the roughest of housing estates.
Look at the Sony and Samsung TV’s hanging on the wall, the Xbox games, the latest Iphones and Ipads. They mightn’t have enough money to feed their kids, but they’ll always find money for the things that they want.
Go out onto the roads. Just watch the cars on the road for 15 or 20 minutes. Do you notice how many of the cars you see are Audi, BMW and Mercedes? And they will tell you that there’s no money? Don’t believe it for a minute.
If all people wanted was the cheapest of everything – we’d all be driving the crappiest, cheapest cars available. But we don’t.
If you decide that you just want to compete for the low cost work, then that’s fine. But just know that even if you think that you can out price and out work the competition now – that’s a very short sighted approach to business.
If you’re 21 years old, fit and healthy and don’t have a mortgage to pay or children to feed – the you can happily work 12 hours a day and price yourself lower than the competition. Heck, you might even feel like you’re making a small fortune! I’ve been there…. When I was 20/21, I was selling and installing home alarm systems for about 100 (pounds at the time) less than any of my competitors. I was working a full time job and fitting the alarms on the side. It was a great time for me. I worked all the hours available, 12 hours on a Saturday, but I was doing about a grand a week on top of my salary at the time.
My competition hated me though! But i didn’t care. However, if they had been smart, they could have taken that business themselves and closed me out. But they weren’t smart. Most were big, dumb lazy businesses.
Unfortunately, many small businesses, even though their intentions are good, act in the same way as the big dumb, lazy businesses. They look around them at the competition and they do exactly as the competition. If the competition drops their prices – they drop their prices. That’s a downward spiral that there’s no way out of, until someone goes out of business…
So, why differentiate then? Differentiating allows your business to stand out from the crowd – from the competition. Differentiating your business gives your customers more reasons to consider doing business with you – other than just basing a decision on price.
In the absence of any other information – the customer will almost, always revert to the only comparison that they know – and that’s price. If your business chooses to behave like a commodity – then prepare yourself to be treated like a commodity.
Give your customers a good reason to believe that you are the best choice and you can win more business and get more customers – even at the higher price.