All Posts Tagged With: "price"

The temptation for many small businesses owners is to entice customers with “the lowest prices.” After all, everyone is looking for a bargain, right?

Competing on price might result in some short-term success, but it ignores the categories in which you can distinguish yourself long-term: value, quality, knowledge, customer service, training, and the ability to solve problems, to name just a few. Competing on price alone causes customers to see you – and your competition – as offering identical products and/or services.

Sure, offering the lowest price can help you close a sale, but does it gain you a loyal customer, one who will return time and again to buy from you? In reality, all you’ve done is complete a cold, calculated transaction, another line on the balance sheet. There’s a huge difference between completing a transaction and building a relationship with your customers.

Maybe that “customer” will return if you continue to offer the lowest price. And if the competitor down the street lowers his price? Well, goodbye customer. Are you going to lower your price to woo that customer back? Will they ever feel comfortable paying full price again?

Here’s a suggestion…don’t focus on price. Instead, listen to your customers, learn what they need, how you can make their lives easier and more satisfying. Price should be the last thing you talk about. If you can solve a problem or fulfill a need, price is almost irrelevant.

Your job as the business owner is to find out what the customer wants and needs. Ask lots of questions, then use the benefits of your product or service to show how you can save the customer time and money, or make their life easier and better.

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(Seventh in a Series)

Your persuasive copy must convince readers that not only is your product or service superior, it’s also a great value. Since it’s never a good idea to compete on price, how can you do this?

One way is to stress the cost of ownership rather than the cost of purchase. If you can show your product will last longer or your service will produce a greater return on investment, it’s easy to justify the higher initial price.

Take two digital printers with identical features, for example. One’s price tag is $300 more than the other. But the higher-priced machine produces copies at half the cost of the less expensive competitor. Over the two copiers’ expected life cycles, the higher priced version will save money in the long run. Your copy can and should reflect that.

Cost of ownership includes several factors: maintenance, support, and repairs are just a few that can be mentioned in your copy. The product or serve that costs the least to purchase may be the most expensive to own and operate.

Another way to build value is to stress that the price you are asking is small relative to the revenue it can produce or save. Copywriter Bob Bly uses this example:

“What would you do if the EPA assessed a $685,000 fine against your company for non-compliance with environmental regulations you weren’t even aware existed? Now get the special 50th anniversary Edition of Perry’s Chemical Engineers’ Handbook for only $4.97 (list price $129.50) with your No-Risk Trial Membership in McGraw Hill’s Chemical Engineers’ Book Club.”

Who could turn down paying $4.97 for information that might save them $685,000? They would probably gladly pay the $129.50 list price!

If you product or service will be used over a long period of time, it’s a good strategy to emphasize that cost over that extended time. It helps reduce the sticker shock. Life insurance companies are particularly adept at this. Rather than pushing annual premiums, they often break the cost down into months, week or even days. “Protect your family for 55 cents a day” sounds more affordable than “The annual premium is $200.”

(Next: Close with a Call to Action)

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