By now, you’ll know that I’m on a mission to help you earn more from your small business. It all starts with making more profit.
There are plenty of ways to increase profits: some easy, others more complex, so I’ll share some advice that I gave a small business client earlier this week.
Their issue was unprofitable sales. The company would all too often end up selling their products and services at a low price that wiped out much of their gross profit.
So why were they doing this?
It turned out to be that they didn’t know how to price their products and services properly – or how to market and sell against their competitors. They wrongly thought they needed to match or beat their competitors price to win a customer’s order.
So, while we’re discussing beating competitors to the order, let’s deal with ‘price’.
Too many small businesses think that to win an order against competitors, they have to match or offer a lower price. If you can do this, then good for you, but for most businesses, this strategy is a race to the bottom and utter madness.
There is almost always a competitor that can beat you on price. So, don’t go there; you should work smarter than that.
Five Powerful Alternatives to Selling on Price
Here are five alternatives to selling on price. They may not all apply to you and your product or service, but I bet one or two will.
1. Higher Quality always helps justify a higher price.
If you have higher quality then tell prospects in a way that shows your product or service is a little better than your competitor’s. My golden rule here is – you only need to be 10% better to win the order!
Even if the quality of your product or service is identical to your competitors, promote whatever aspect of its quality you can. The chances are that even if your competitor has a similar level of quality, they’ve not promoted it as powerfully as you.
2. Customers will often pay a premium for a product that is safer to use.
3. A product or service that saves time will generally be worth more than one that doesn’t.
4. A increasing number of customers will pay a higher price for ethical, sustainable and recyclable.
5. Giving better service, being polite and maintaining good relationships with the prospect is something that small companies can do really well and that larger companies very often don’t.
In each case, be sure to communicate clearly and precisely how yours is a higher quality product or service, safer, faster, more sustainable than your competitors, or whatever it is that prospective customers will value and see as important to them.
Throughout the life of your business most if not every one of your prospects and customers will engage with your competitors, so it’s vital that you pay serious attention to your competitors and position your products / services in a way that wins you orders against them – and not just on price!
Interested in earning more from your business, then here’s an article you’ll find helpful.