To win the customer –offer more VALUE instead of CUTTING PRICES to beat the competition

14 09 2007

If I told you I could give you a great price now but later I would have to make a shortcut on servicing your needs would that be okay? I would hope you say no. Isn’t that what seems to happen if somebody gives you a unbelievable price to get your attention? Let me give you a few examples to what I mean.In Walmart how hard is it to get somebody to help you understand say a digital camera? In my experience Price maybe what sometimes gets the customers attention however offering the consistent value is what keeps the customer coming back time after time.

Offering more value in a business transaction is the way to go because value can grow and expand over time. Value can be so may different things but the overall question it answers is —how does this improve the customer’s experience with my product? For example it can be something as simple a really easy to understand instructions that make the setup time quick and frustration free. Or maybe its a hassle and hold free customer service experience that helps the customer do more with their day because they are not sitting on hold waiting and waiting for somebody to talk to. The further you can think out of the box with the question of– how can I improve the quality of my customers life? the more successful you will be.

Cutting prices on the other hand has diminishing returns because for starters it my get the customer in the door but it won’t keep them coming back unless you continue to do more of the same– lower prices. Its like a pie that your slicing up in pieces and every time the take a slice out the pieces get bigger. At which point is the pie gone? You already know that the primary challenge with lowering prices is that your cost unless your an economic genius either stays the same or goes up. You need to be looking at the long term of your business survival instead of the short term of the price concerns of this specific customer. Start finding ways to make bigger pies so everybody goes home full before it is finished.

One of my rules of thumb is that if you feel pressured by a customer to lower your prices then you are NOT offering enough value in your proposition. If you can’t deliver more value to this customer either one of two things is true –a) the customer doesn’t care about long term value they just want short term price in which case you might want to consider not taking that customer because it will be a money losing scenario long term or b)you not looking at what the customer values you are looking at what you find to be valuable and those are worlds apart. So there is a way to offer more value you just have to find it. Oddly to sometimes offer more value can’t help you lower costs because your customers are happier owning your product. But I must save that lesson for later.

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26 09 2007
Business » To win the customer –offer more VALUE instead of CUTTING PRICES to …

[…] edgar_biggs@yahoo.com (Obinna Heche) wrote an interesting post today onHere’s a quick excerptOffering more value in a business transaction is the way to go because value can grow and expand over time. Value can be so may different things but the overall question it answers is —how does this improve the customer’s experience … […]

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