If you’re a startup or service provider, it can be hard not to get drawn into a price war with your competitors.
When your target market has a number of options to choose from, they shop around to see what’s on offer. We all do this, right? – it’s part of the wonderful world of commerce, and e-commerce particularly.
It’s too easy to be the cheapest – to settle for a ‘price low, sell-more, make more moolah’ mentality.
But if you’re thinking of positioning your service as the cheapest, or ‘most affordable’ (cheapest’s fancy-pants cousin), beware – you could be about to sabotage your brand, scare off potential customers now AND in the future, and undo all the hard work you put into making your service so awesome.
Here’s why you should avoid the easy option:
The Race To The Bottom
It’s tempting when launching a new product or hanging out your shingle as a service pro for the first time to under-charge as a way of grabbing your chunk of the market.
You figure: either your product’s not not quite fully developed, or you’re not experienced enough to compete with others in your niche charging bigger buck$.
So, you find the cheapest competitor and undercut them. Boom! Guaranteed customers, right?
Trouble is, the race to the bottom is never actually won…
Even if you think you’re winning ’cause your getting a bunch of sales at $1.99 and people are choo-choo-choosing you ’cause you’re the cheapest option, it’s never too long before someone undercuts YOU, and you catch them hurtling past you towards that ever-shifting finish line marked ‘Cheapest’ with a crowd of new customers…
…some of whom were YOUR customers yesterday…
…and who are now legging it after Johnny CheapStuff, throwing their change at his lovely low-prices.
You’re Defined By Your Difference
Your brand – and it’s the same for startups and service pros alike – is defined by what makes you different. By what makes you stand out from the competition.
That’s what branding’s all about really: that ‘recognisable difference’.
The good news is, branding doesn’t have to ‘happen to’ you. It shouldn’t, at least.
You have control over it – lots of control, if you do it right.
It’s your job to define your difference. So why choose to define yourself by price alone? Once you become ‘The Cheapest’, all your other qualities shrink in significance…
They get stuck in the shadow of that giant $ sign that says “Look at me, I’m all about the price!”
The rest – quality, customer service, ethical stance etc – becomes just an afterthought.
It’s good to represent value, but don’t hide all your other great assets behind a flippin’ great price mark. Choose to build your brand – “What people say about you when you’re not in the room” – around something better, something more ambitious that does your work justice.
Being The Cheapest Just Ain’t “Sticky” Enough
How you market your biz is HUGELY important to its success…
(I know, “Holy crap, a copywriter of all people talking about the importance of marketing, who’dathunk it?” etc)… but to make yourself/your biz more memorable in your niche, to really STAND OUT in that crowded marketplace, you need good messaging.
“We’re/I’m the cheapest” just ain’t sticky enough.
By that, I mean it isn’t original… it doesn’t stick in people’s minds once they’ve stopped worrying about price (and they will – particularly if they’re in the market for something important to them).
Yes, a hypothetical BMW priced at $500 is so surprisingly cheap the vendor could lead with just the price and buyers would flock to that hypothetical dealership (“Heyyyy, Hypothetical Hank here and you won’t BELIEEEEEEEVE what a deal I have for ya today…”)
…but that’s only because BMW the brand has already established itself in the prospects’ minds with other ideas and messages about what it represents. Quality, craftsmanship, exclusivity etc.
That’s what makes the price so appealing – it’s all the other stuff ‘stuck’ to the buyers’ minds based on earlier messaging.
Cheap Attracts Cheapskates
Sure, we all love a bargain. But not every time.
Most of us realise that to get high quality you sometimes gotta pay a higher price. And we’re prepared to do so, especially when it’s something we perceive as important.
If you set your prices ankle-bitingly low, you’ll attract the kinds of customers who don’t consider what you’re offering to be important.
And you risk having your reputation defined by being the go-to brand for cheapskates and freebie-seekers, with all of the PITA attitudes they bring with ’em.
You’ll be doing bizniz with folks who don’t care about quality, and they’ll treat you like a vending-machine.
This is particularly bad news for service pros and entrepreneurs – clients who make biz decisions based on ‘Cheap’ (and his slutty bro, ‘Fast’) will expect you to stay as you are, not growing, not building value.
They’re only after one thing (just like your mother told you) and once you try to outgrow that, it can be hard to shake off or change direction.
Business is about relationships, so if you want to start good ones with mutually beneficial results, don’t sell yourself short.
Tell ’em you’re NOT the cheapest, BUT… and then hit ’em with what’s truly unique about your work that they won’t find anywhere else.
If You’re Not The Cheapest, Then Who Are You?
Ok, so you’re leaving the bargain-basement-chasing to the noobies and amateurs. Cool.
You’re gonna stand on your own two feet and tell the world loud and proud:
“…um… …. ?”
Hang on, what the hell? If you’re not competing on price, what are you offering?
It can be tricky to decide how else to define your biz… your value proposition.
To uncover the best value prop – to discover what’s most unique or appealing about what you do, is sometimes not even about what YOU consider most valuable about your service.
So ask around…
If you have customers, ask them why they came to you. They must have seen or heard about alternatives – how come they chose you?
If you don’t have customers yet, get online (or off, for that matter) and start hanging out where your prospects are.
What are their problems? What are they looking for help with? What do they VALUE?
Forums, social media, blogs (read your competitors’ blog comments, seriously. You’re not cheating on your brand, you’re gathering intelligence. You’re 007… glamorous, clandestine…)
…These are all great resources for finding out how to position yourself as the BEST SOLUTION TO A PROBLEM.
And once you do that, you’re on your way.
Ok, now go get ’em. And don’t be cheap.
Need help defining your value proposition or USP?
Maybe you think you have one but are struggling to put it into the right words, the right messaging?
Drop me a line, I can help. Head here to get in touch.
I’m not the cheapest, but I am a certified CopyHackers Conversion Copywriter with experience helping startups, small biz and entrepreneurs get their message across to attract the right customers.