Great Brands Compete On Value, Not On Price
Take a moment to consider this statement: “Great brands don’t compete on price alone.” If you are an entrepreneur or in a position where you’re responsible for the long-term success of a business, let that sink in, because it will ultimately determine how you fare with this task.
In today’s increasingly diverse yet still often saturated marketplace, the chief goal is to be viewed as a brand, not a commodity. Time and time again consumers have demonstrated that they will happily pay more for a brand that delivers value and with which they share a connection – it’s a well-documented phenomenon that’s been motivating purchases way before our time. As far as future projections, there continues to be an overwhelming amount of compelling data released confirming a brand’s potential to significantly influence consumer behavior.
Don’t get me wrong, it is important to stay priced competitively and to explore all of the different avenues that might positively impact sales and revenue. However, if price is the only distinguishing characteristic that would make a person choose you, you’ve fallen into the commodity trap – and sadly, you’re not alone. When you are focused on price as your competitive advantage, cost cutting is your primary tool. This can easily turn into a fixation that’s unhealthy for you and your business. It keeps you stuck in place with limited options, instead of being able to generate the numbers that will afford you a healthy margin to take risks and invest in areas of your business that will allow you to grow and improve over time.
While discounting strategies might provide a moderate boost in the numbers of customers served or units sold, reducing prices may have a devastating effect on profit margins. If you can’t afford to keep the doors open, it doesn’t matter how many people want to go through them. To make things even worse, once you devalue your offerings it becomes the expectation moving forward. When you put a number out in front of everything else, it develops into the most prominent facet of your identity and thus, others will view your business as one that lacks dimension and substance. To compound things, it’s a tactic that doesn’t encourage customer loyalty. Rather, it attracts those who may be just fine with doing business with you for the time being, but will just as easily move on to the lowest number without hesitation. You’ll ultimately find yourself exhausted and with little sustained growth to show for it, just a revolving door of new customers and one-time transactions. Limited population = Limited potential.
All told, without an understanding of all of the reasons a person should do business with you outside of price, which you’re solely responsible for conveying to the public and more specifically your target audience, there’s no compelling reason to stick around. Instead of getting caught in a vicious cycle of vying for business by lowering your price, invest your efforts in setting yourself apart from your competition in other areas, thus creating interest and at the same time, establishing that you’re more than just a price tag. Because you are – but it doesn’t really matter if you’re the only one who knows it.
So, because it can be somewhat of a knee-jerk reaction to turn to pricing strategies first because they’re likely to yield instant gratification results to some extent, consider at what cost and remind yourself, “Great brands don’t compete on price alone.” Instead, stay committed to building a brand that brings clients coming back to you because of who you are and what you bring to the table. Be a trusted resource, share your expertise. Be a quality provider in all areas, from your actual offerings to your character and actions as a good community partner and involvement in the place where you do business. Be willing to provide value even when you’re not immediately compensated, to go above and beyond whenever and wherever possible. Then, be the one who shares those aspects with the world!
To learn more about how Strictly Business can help you, contact me directly at (402) 466-3330 or visit StrictlyBusinessOmaha.com/connect. (You can also click on our Staff Letter tab online to view past articles)