When it comes to cutting your prices it might sound reasonable in the short term: If you lower your prices, you might attract more customers and boost your revenue. However, it’s not just a short-term plan. It’s also a short-sighted strategy. This article is focused on how to keep your business competitive without lowering your prices. In fact, these four alternative solutions can result in much greater revenue growth.
1. Focus On Your Value
Maybe you charge more than your competitors. Embrace that fact and learn to work around it. The word “but” might seem unimportant, but it can make a huge difference when you’re trying to sell a product or service at a high price point.
The idea? Acknowledge your high prices, then follow with the word “but” and add a value statement.
For instance, if you’re talking one-on-one to a customer, you can say, “Yes, it’s true that our prices are high. But, we believe that our customers deserve and expect the best solution.”
You’re sending the message that you care enough about customer satisfaction to set your prices at a premium and therefore deliver higher quality service.
You can use the same strategy in your marketing materials. Instead of mentioning your high prices, however, focus on what comes after the “but.” Identify your unique selling proposition, or USP, and use it to your advantage.
2. Get the Word Out
People care more about benefits and advantages than they do about dollars. While many consumers quibble about price, they’ll often abandon that barrier when they understand what they’re paying for.
Make sure your potential customers know what value you bring to the table. Do you have the best customer retention rate in your industry? Have you served high-profile clients? What awards has your company, product, or service won?
Tout those details on your website and other online properties. They not only communicate what new customers will enjoy if they buy your product or service, but they also communicate social proof. Other people or businesses have found your company spectacular.
3. Distinguish Your Business
Differentiation is one of the key elements of sales and marketing for any business. You have to know what you offer that your competitors lack.
Competitive research should have been part of your business planning, and you should keep doing it once your business really gets going. Continue to spy on the competition online so you can identify new differentiating factors, and keywords they are using on their website to promote their business. Use a resource like www.Spyfu.com to get internet intelligence.
You can also offer add-ons that increase your products’ or services’ value. For instance, you could include free training for customers who buy your software program. If other companies in this space charge for training, you’ve created differentiation.
Add Product or Service Tiers
You’ve run across companies that offer bronze, silver, and platinum service levels, right? And maybe you’ve seen different models of the same vacuum cleaner. This strategy has become prevalent because it works.
Start by selling the premium offering. If the customer isn’t willing to settle, introduce the next tier down. You’re offering solutions that the client can use, and the customer still feels as though he or she has “won” the negotiation.
Before you start changing your price tags, think about other ways to remain competitive in your industry. Believe it or not, consumer decisions don’t always boil down to price. For even more information about making your business succeed, download two free chapters of my best-selling book, “Become Your Own Boss in 12 Months.”