Strolling through lovely Portsmouth, NH, I stopped into a local store and engaged in an eye-opening conversation with the small business owner about staying profitable.
Sharron (real name withheld by request), had been enjoying success in business for over 14 years, but over the course of the last couple years, something shocking happened….
… something that might put her out of business and….
… will likely put thousands of other entrepreneurs out of business too!
Unless they do something NOW to stop the bleeding!
You see, Sharron’s a retailer. She sells the same products that many of the other “big chains” sell and, though, price has always been somewhat of a concern, she said that her customers always appreciated the service and convenience of being able to buy their goods right away.
But, things have changed….
Sharron said: “We’ll spend 30 minutes with a customer trying to help her out with her purchase and then she’ll turn around, check the price on Amazon, see that it’s lower and make the purchase right from her mobile phone! Even with 2-day shipping, they’re still cheaper. We can’t compete with that and it’s killing our business!”
And so it begins, when you compete on price, your business becomes marginalized, your customer loyalty diminishes and your profitable days become numbered!
Competing on price is the lowest form of value you can offer your customer!
Zappos … not the cheapest shoe store, but they have one of the best guarantees in the business (365 day, free return shipping, hassle-free guarantee!). Pure awesomeness!
Starbucks … not the cheapest, but people enjoy the experience of a Starbucks from the comfortable setting to the exclusivity of a “premium” beverage. Why else would somebody pay almost $5 bucks for a cup o’ Joe?
Apple Computer … definitely not the cheapest, but they have a strong community of developers, ready-to-help live service locations, and many other offerings for their members. Heck, this company benefits from its loyal followers trying to convert rival PC users into raving Mac fans! Unbelievable!
People don’t always want you to be the cheapest.
They want you to be more. Give more. And, in reward, they’ll happily pay you more!
So, what are ways that you can avoid competing on price and increase the perceived value of your product (even if someone could buy cheaper elsewhere)?
