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All Customers Care About Is Price?

Guest post by: David Flannery

Article Overview: "If you find a price lower than ours, we will beat it by 10%" "Lowest price guarantee" "Lowest price guaranteed" " Lowest Price promise" You see these price advertisements everywhere, nowadays there is a laser focus on low price. For some businesses and companies lowest price has become their only competitive weapon in their marketplace, and not just because the economy is bad, but because it's the easiest way out. It is, however, also the least profitable way of doing business.

All Customers Care About Is Price?

"If you find a price lower than ours, we will beat it by 10%"

"Lowest price guarantee"

"Lowest price guaranteed"

" Lowest Price promise"

You see these price advertisements everywhere, nowadays there is a laser focus on low price. For some businesses and companies lowest price has become their only competitive weapon in their marketplace, and not just because the economy is bad, but because it's the easiest way out. It is, however, also the least profitable way of doing business.

Business owners get frustrated and wonder why customers keep hammering them on price. My answer to that question is... because you have trained them to focus only on your price and not on your value. If all of your marketing, advertising and sales materials focus only on your price, then of course your customers and your marketplace are going to focus only on your price because you've given them no other option.

By constantly focusing on your price and not your value, you're forcing your marketplace to view what you sell as a commodity and people will always look for the lowest price for a commodity.

Look at your business, what are you focusing on, is it the price of your products and services, or is it on the value you give to your customers and marketplace. If you are focusing on your price or using a lowest price strategy I urge you to look at the value you are giving, and price accordingly.

Imagine what would happen if a new competitor, a bigger company, entered the market with a lower price than you could offer, what would happen? Would your customers remain loyal to you? Not very likely if all you were offering them was the lowest price.

The lowest price strategy is extremely damaging to your business:

1. It forces the marketplace to look at your business as a commodity.

2. It has absolutely no customer loyalty ( they are only loyal to the lowest price because you trained them to shop that way).

3. It severely cuts your profit margin. This is, of course, unless your business has the buying power and low cost structure of Wal-Mart, Bunnings or Kmart(Australia) .

Even WalMart , arguably the inventors of cut price selling and easily the most well known discount seller, has in recent times had a rethink about the lowest price strategy. They have changed their slogan from " Always Low Prices" to " Save Money: Live Better".

If the biggest discount retailing business in the world has had a rethink about the " Always Low Prices" strategy, maybe you should too.

So, if you believe that all your customers care about is your price, then you and your business are partly to blame. Start focusing on the value you give to your customers, and when the pressure is on think " increasing my value" rather than " lowering my price"

© 2010, Profit Growth Dynamics International. All rights reserved.

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Article Tags: cost plus pricing, customer loyalty, discounting, low price, price, pricing, value



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