“I love your services and your products but the price is way too much.”
I’m sure as small businesses, service providers and entrepreneurs, we’ve heard this line a thousand times. And, it usually makes my blood boil. However, when the client adds “for me” to the end of that statement, I have no problem with it. I actually understand. I am in no ones pockets, so I can understand someone stating a price is out of their budget, but to tell someone their price is too much is rude and unacceptable.
Especially when you are the one reaching out to the service provider. My advice stands and remains, never compete for business based on price. My mantra remains, I never claimed to be the cheapest. But I am worth it.
Pricing is something that creates a lot of anxiety for business owners. It’s because we are trying to be fair to our customers, ourselves and our industry. Various factors are considered in how we charge our services and products (we will have a separate discussion about this). Once you have set your price and are comfortable with it my advice to you is not to use your price as a way to get customers to come to you or return. If you are being hired because you are the cheapest, you are doing yourself and your clients a disservice.
It is extremely difficult to be the cheapest in any market and provide the level of customer service and quality service or product that you want your brand to be known for. Lower profit margins means you are able to invest less into your business and your business grows at a slower pace, if at all.
Tips To Avoid Price Competition In Business
This important busines lesson shares my tips on how to eliminate price as the barometer by which clients hire you or buy your products. Try these tips to avoid price competition in business:
1. Build Your Reputation
Build your reputation by consistently and efficiently providing quality level work! At the end of the day, we all want shoes that look good and lasts long. We want graphic designers that responds to our calls and provides quick turn around. And we want caterers that show up on time and wows our guests with great food. Do the right things over and over and it will get around.
Last year I catered an event for a young lady who received my number from a colleague. She received my quote and called me back. “this is too much” she exclaimed. I explained I could not lower the price because I know what it takes for me to do what I do. I don’t cut corners. My staff will arrive 2-3 hours prior to your event to set up, they will be courteous to your guests, there will be enough food.
She said she couldnt afford me. Two days later she called me back. She said wow, everyone I ask about you had nothing but amazing things to say. She said, “this is such an important day for me I can’t risk things not going right.” Even though I have a cheaper alternative, your reputation precedes you. I will go with you”. Price alone is not the reason consumers choose you. It’s who you stand for and what you are known to have done, continuously.
2. Differentiate Yourself & Add Value
I know I can go on craigslist and get a website for just $100. But will I? Most likely not. The difference between the graphic designer that I’m hooked and the craigslister are numerous. She pays attention to me and has an understanding beyond Just coding and html. She understands branding, and helps me create not just the images, but also understands Marketing and human psychology and helps me in crafting my brand.
How can you differentiate yourself in your business? What skill sets do you have beyond your actual product or service that will be a plus? Yes I can get a cup of coffee at the corner Coffee shop, but there’s no jazz music playing in the background like they have at Starbucks. They don’t even write my name on the cup!
3. Be DOPE
The foundation to charging what you want and not be worried about what others in your industry is charging boils down to creating amazing work. Your products and service has to be good. No one can deny great work. Even if they can’t afford it, they will try to because it’s that GOOD. Many people buy things they can’t afford. Because the product is that good. Be that good! Be dope!
4. Create a Community
What does your brand represent? Create a movement around what you do. People like to belong. Mercedes, Louis Vuitton, and Apple. They all are what they are because of the community they have built around their brand. Their Brand stands for something and people want to be part of that. How can you create a community around your work? What do you stand for? Quality, Refinement, Women empowerment, Class? Find it and share it! I can buy a gym tshirt for $5. But I consistently buy from suppliers that sell shirts for $25-$45.
Because I want to be part of a community of “strong women bosses in the boardroom and the gym” or #FitAfroGirls. What words describe your brand and how can you rally your supporters around that ideology? Create a movement. Whole Foods aka Whole paycheck, has built a community around people who want to eat well and take care of their well being. It may cost you $120 for 7 items, but there’s a sense of self care that’s associated with shopping at Whole Foods. Who wouldn’t want to be part of that community?
Great products/Service, value and community building are all great ways to ensure you get people through the door. Be known as the person who consistently comes through. The listener. The fixer. Build your reputation around the Key factors that matter to your ideal customer and price will be the least of the reasons to come to you.