…that can boost your margins and bottom line and could easily make the difference between success and failure.
Competing on price alone is a mugs game in most cases.
(In fact, my mate Pete Godfrey would probably describe it as “Evil”!)
OK, there are some rare cases where it can work…
…BUT it means that you absolutely MUST be the lowest cost producer.
Your entire strategy has to revolve around relentless reduction of costs.
Think companies like Aldi or successful companies in true commodity markets.
For most businesses this is neither viable nor desirable…
…after all, there can only be one person offering the lowest price and anyone can always come in and offer a lower price (at least temporarily).
Far better to adopt a differentiated strategy and communicate that clearly to prospective customers with a clear USP (“Unique Selling Proposition”).
And by having a clear USP, it’s easier to sustain a higher price point.
That’s because with a powerful USP, you give the buyer a reason, a justification, as to why it makes sense for them to pay the price you’re asking.
Few people buy solely on price. According to marketing experts like Dan Kennedy, only about 10-15% make their buying decisions with lowest price as the determining factor.
They’re usually the group that has to buy on lowest price because of their economic circumstances…
…and being blunt you probably don’t really want them as customers in most cases.
BUT for everyone else, if there is no clear difference between competing offers…
…in those circumstances they too will most likely opt for the lowest price item.
And that’s a problem for many business owners and marketers who don’t have a clear USP.
After all, if you don’t know, or don’t communicate clearly, why your product or service is worth a higher price…
…how can prospective customers know?
The result is that accidentally many businesses end up having to compete on price and resort to discounts and sales.
Hey, I know it can be hard work crafting a compelling USP…
…and a way to express it so that people understand it instantly…
…but there’s a big payoff in doing so.