Cheap as chips?
Not true. (Unless, of course, they hadn’t given their customers anything else to think about other than price.)When we buy a product or service we make a decision based on the price and the value we are going to get by owning it or renting it.
We rarely buy the cheapest. (Hands up if you always buy the cheapest dress or suit in the shop? Of course you don’t.) But we do search for the best value.So if your business is coming under price pressure, don’t automatically lower your prices to compete – look to increase the value you provide instead.
Being cheaper is easy and it’s fast but it will cause you problems:1. It sends the message that you’ve been ripping people off in the past 2. You’ll have problems raising your prices when the recession is over 3. It slashes your profit margins so you won’t have the cash to invest in what really will make a difference: better marketing
Just imagine if tomorrow you had to increase your prices by 50% - what would you do? You’d have no choice but to focus on providing even better value for your customers. Maybe it’s time to start thinking about how to add value now. Andrew Chemney Managing director Ignition CBS