That’s what many business owners say – especially if they don’t make enough money. It is true – the great majority of people look for promotions, special offers and hot deals. They are typically people just who can’t afford top quality products or services, which just must cost more. Nothing wrong with that. Our potential market is made up of a number of segments, and you should know which segment you’re in.
The people who look for bargains typically don’t make loyal clients. They just go where the prices are lower without giving it much thought. And there will always be someone who will be ready to offer lower prices than you! So think twice before you decide to go that alley and compete on price.
Kevin Maney, the best-selling author of “Trade-Off: Why Some Things Catch On, and Others Don’t” writes about the conflict between quality and convenience, which each entrepreneur should understand. The book is fascinating; Mr Maney gives numerous examples of products and services you and I use every day. He helps us to understand how consumers and customers make purchasing decisions. The message is pretty straightforward: Your client looks either for the lowest price or the highest quality. And you need to decide which group you are selling to.
Most business owners think that they should be offering the highest possible quality at the lowest possible price – and they are fucked! Why? because they are too expensive for clients who want the lowest price, and not good enough for those who need top quality. Does that make sense?
Another misconception is that everyone is price – sensitive.
Believe me – not everyone! In some situations, I am not! And I am not writing it to impress you. Let me just give you two examples:
- Two years ago, I was looking for a fitness coach. I wanted someone who would help me get back in shape. I contacted a few personal trainers, and all of them seemed to assume that I was looking for the lowest price. And in fact, my priority was completely different – I wanted the top quality and didn’t mind paying more! None of them even asked what I was looking for – they just assumed that it was the best deal that I was after.
- I decided to take my partner to Mexico at the beginning of last year. And as it was a special occasion, I wanted to make it BIG – with all the extras! The agent I was on the phone with was talking about “reasonable prices and the times of the year when it was cheaper to travel”. She didn’t ask what trip I wanted, what was important to me – if she had, she would have known that it wasn’t the lowest price!
What do your clients look for?
How do they make purchasing decisions?
What do you do to find out?