Thursday, 16 April 2015

A myth about your pricing strategy




There a number of myths about creating the right price for your customer and developing a pricing strategy that is right for your business – here is one of my favourites - If you are more expensive than your competitors then this will give them an edge and customers will choose them instead of you
 
It’s quite easy to see why the majority of business owners might believe this to be true - especially when you consider that most of them believe that people make their buying decision based on price and price alone
 
But let’s take a step-back from business and look at things rationally
 
When we look at business objectively we know that this just isn’t true - because if it was, car makers like Ferrari, Maserati and Porsche and all of the other premium makes would be struggling for business – and we know that just is not true – recent reports show that Rolls Royce increased their sales 5 years in a row smack back in the middle of a double dip recession while some of the cheaper car manufactures nearly went out of business and had to be bailed out by the UK government!
 
There are, of course, those customers who only buy the cheapest goods at the cheapest price – those customers who will move from supplier to supplier in order to get the price down – and there will be suppliers who will deliberately cut their prices in order to obtain work at any price.  But the majority of customers don’t - even if they say they do!
 
But then, on the other side of the coin, there are those customers who enjoy spending more on what they buy in order to get better quality products and services and a better overall customer experience
 
There are even customers who believe that you get what you pay for and who therefore won’t buy something because it seems too cheap!
 
Being cheaper than your competitors doesn’t give you an edge. Chances are you will be chasing a completely different customer from your competition.  Think about EasyJet and the other budget airlines – not to say that given the right circumstances a typical Virgin Atlantic customer would not travel with a budget airline – but in the main a Virgin Atlantic customer travels with them for a reason – and that reason is unlikely to be about price
 
When thinking about your own business always remember – good work is never cheap and cheap work is never good

Let your competitors fight with each other for those price buyers, while you target the VIP first class clients who want to spend more, buy more often and appreciate the true value of what you offer


Why?
 
Because the people that buy more often and appreciate the value of what you do tend to be your best clients - and the opposite is true for price buyers
 
I'm yet to meet anyone who actually enjoys working with 'price buyers'
 
The thing is if you're doing business with people that you don’t enjoy working with, two things are true:
 
1. It is your fault because you allowed them into your business and you keep them there
 
2. You don't have to put up with it.
 
If you do put up with it, then you're making a choice and if you don’t want to put up with it anymore, then you should fire them. It’s as easy as that  
 
If you want to make a difference in your business then price should not be your biggest concern.  Contact us today and see how we can help to solve your problems (and maybe even help you find ways to improve your business so that you don’t always have to focus on price!)

Call us anytime on 084 3289 3288 or email us at enquiries@blueboxconsultancy.com

If you want to learn a little bit more about Blue Box, the things we do, and the people with do it with, then check out our website at www.blueboxconsultancy.com

Until the next time – be bold and do good business



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