Business owners often believe that they need to compete on price and therefore charge their product or service on the lower end of the market price range. But there are some good reasons for charging based on value rather than price. Here are some tips.
Customers Pay for Value
As Red Adair once said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” The cheapest product or service usually does not provide the best quality so you can often save time and money by opting for better quality from the start. People pay to have a good experience and better quality provides a better experience for them.
Selling at a Higher Price
When you sell at a higher price, you will need to sell less of your product or service to meet your financial goal and this can also make business growth easier. You will have fewer customers to manage, which will save you time and money and you will be able to focus on serving a specific type of customer well. Your marketing will also be easier when you concentrate on a particular type of customer.
Emphasize Your Key Differentiators
Communicate clearly what makes you different from your competition. One way to do this is to add a comparison chart to your site. Instead of getting into a pricing war with competitors, offer something better than your competitors that will set you apart. Become the premium option in the market and invest in good branding and customer service.
Provide Great Customer Service
One of the best ways to differentiate your business from the competition is to offer exceptional customer service. Even when customers like the product of a company they often switch to another company that has better customer service and cares more about its customers and solving their problems.
Be consistent about your prices. If you change your prices often, it can confuse buyers. When pricing, also remember that there can always be a competitor with a lower price and established competitors can afford to lower prices to price out new competition. But in the long run, if you have a good product or service and you run your business well, you will be successful.
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