Stop Competing on Price
If prices have become an issue with your customers, maybe it’s time to look at what other value you offer them.There is nothing wrong with competing on price. However, if it’s not a part of your overall marketing strategy, then flirting with price concessions to win short-term business could indicate a dangerous trend for your business. Compete on value, rather than price. Use the following questions as springboards toward action.
What Is Unique About Your Business? If you offer the same services and products that your competition does, you have nothing unique. If you serve customers the same way your competition does, you are not exceptional. On the other hand, you become unique when you are noticeably more convenient, more responsive, more capable of customizing aspects of your services and products.
What Do Customers Value Most About Your Business? Determining what your customers value requires fresh thinking. Start by making a list of all the services or extras you offer. Rank this list in order of what you think is important to your customers. Survey your customers for their lists. Does your list match their lists? If it doesn’t, develop value-added services in the areas your customers find the most value. Survey your customers regularly.
How Do You Tangibalize Your Best Values? By “tangibalize,” I mean how effectively do you communicate the value-adding services you provide customers? Miller Office Systems in Fort Worth, Texas, slaps a sticker on every outgoing shipment that reads, “Back orders cost you time and money. Miller Office Systems saved you both with this 100 percent filled order.” Miller successfully tangibilizes its offerings every time a customer receives an order.
Are You Willing to Walk Away From Business? The more often you make concessions or give discounts to price shoppers, the more you signal what your values truly are. And the more requests you will get for discounts in the future. If your prices are not competitive, that’s another story. But assuming they are, a willingness to explain to customers why you are worth more and why you are the best overall value in town is the most profitable decision in the long run. You may be surprised at how many customers will remain loyal once they understand your value.
What Can You Do to Deliver Better Value? Most savvy customers repeatedly ask themselves, “Who has better value?” This consideration does not take into account yesterday—they want to know who is giving them more value today! What new value-added services have you introduced in the past 12 to 24 months? They do not have to be big. It’s often the little things that customers notice most. Encourage your staff to look for new ways to add unique value. Continue to brainstorm ideas and ask customers for feedback.
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