This past weekend, I had a chance to chat with a family member who runs a computer repair business. What was interesting is that his primary marketing model was that he charges less for what he does than the competition.
This is a very common practice in that a business owner will “think” that by charging less than the competition, they are “marketing.”
We know, after decades of research on the topic, that people don’t buy on price alone and in fact, price figures into their buying decision less than 5% of the time!
So if dropping your prices is your only marketing strategy, you’re missing the point of marketing.
Here are a few suggestions that you might want to consider instead of simply putting things on sale:
1) Add Value: Rather than lower your price, add items to your offer that boost its VALUE. You could add some digital content (e-books, reports, audio, and/or video) to your offering. If you’re a service business, you could add some additional time onto your service, or offer to do something more than you usually do. Think of the hair stylist who also gives you a little head massage before getting into your hair!
2) Show Them What Else it Can Do: In other words, you may want to paint an even bigger/brighter picture of what owning what you’re selling will do for your customer.
Think of the infomercials that sell steak knives and they show you what other things you can do with their steak knives. Maybe you can cut watermelon, tomatoes, bread, etc. You get the idea.
3) Take Them Farther Down the Path: Instead of just being focused on what your customer will gain in the immediate term, let them know what buying your product or service will give them in the weeks, months, and even years ahead.
For instance, if I were to sell you a marketing training program, I would mention that once you learn what I have to share with you, you’ll have those skills to use as much as you’d like for the rest of your career. Then I might ask, what is that worth to you?
4) Make the Price Disappear: Yup, you MUST make the price disappear in the minds of your customers. If cannot become the reason why they choose not to buy from you.
In the case of my family member who fixes computers, I asked him what it was worth to a company that had valuable data locked up in a failed computer if he were able to recover that data for them?
His answer told a very different story about what he could be charging his clients because lost data can represent tens of thousands of dollars in lost productivity for a company. In that light whatever his price was would be seen as a bargain by a company with that issue.
Here is my advice for you.
Only lower your prices if everything you’ve tried has failed to work for you. In other words, dropping your price is a last ditch effort and should only be used to avoid closing the doors of your business, and should never be used as standard practice in your marketing.