We’ve all heard it before.
“I went with your competitor because they were cheaper.”
It gets into your head. You start to figure out ways to lower your prices. You cut your profits to the barest minimum to try to win business, and then someone comes out with a loss leader, where they lose money on the deal just to get the customer.
What’s a business supposed to do?
For starters, you need to change your thinking. People have been brainwashed to think that consumers only look for the lowest price. Although that may occasionally be true, it is often not the case.
Furthermore, those are not the kind of clients you want. If you get their business based solely on price, then they will have no loyalty to you and will leave you for a lower price somewhere else.
The key to success is to go for those clients who will pay you a premium price for the value you offer, and will be loyal.
Every business pays a price to acquire a customer. Most small business do not know what that cost is. That is a discussion for another time.
However, once the customer is yours, you can hold on to them and get more business from them at little cost or effort, as long as you provide value and a positive experience.
Thus, by providing value to your clients and providing a good experience, you can greatly increase the lifetime value of that customer. That is the mindset you must have to win at this game.
After the sale, you have to follow up with your clients. Let them know that they are important to you. Give them extra value that they didn’t expect, such as information on how best to maintain the product they bought, or other ways to use it, or something else. The key is that it has to be a gift, not some sales pitch for another product or service.
Once a consumer gives you their business, all you have to do is overdeliver, and they will do more business with you, tell their friends, and you won’t have to worry about being the “low-cost leader.”
