For small businesses, lowering your prices leads to nowhere. In fact, it often leads to reduced profit margins and a minimal bump in new customers. A better way to grow your sales is often to create more value and actually RAISE your prices.
No matter your field, lowering prices should be left to the “big dogs”. Your existing customer base values the product or service you offer above the other guys. That’s why they are willing to pay a premium. You offer something that the others cannot and you should never undervalue that. Lowering your prices will not only cut your profits but you cannot hope to compete with significantly larger competitors by offering lower prices. Their scale allows them to win that fight.
In almost every case, in almost every product category, most people do not buy purely on price. The problem is, they often try to convince you that getting their business depends on you lowering the price; that it’s all about the cost. Don’t believe it. Price is just one part of what they are truly seeking.
Instead, offer a better product.
Yes, adding value requires more work. But that’s business. It is better to spend quality time improving your product and increase your profits than to slash prices and watch your profits spiral while risking a poor return on investment.
If you find yourself considering lowering your prices, stop! Providing more value is always a better option than charging less. Instead of thinking about how low your prices need to be for customers to buy, think about how you can add enough value that they will pay twice as much.
This is the mindset that separates many highly successful businesses from average businesses. Learning to put value creation first and foremost keeps customers ecstatic to pay a premium for your product. Value, not prices, is your competitive edge and the “big dogs” cannot as easily compete with that.