The Marketing Mistake:
Believing the only way to boost sales is to drop your prices
Although price seems like it’s more important in a rocky economy, it’s still not the most important factor in a purchase decision. And focusing on price as a primary point of differentiation will not build your brand over the long term.
Unless you’re Wal-Mart, hammering on being the lowest price is a losing battle. Instead identify the ideas that provide value to the customer and differentiate you from your competition, then build your sales presentation to focus on those benefits. You will provide more reasons to select your product or service than just price. And when you build your brand to be a leader in your category, you will build market share and generate additional sales.
The default in a sales pitch is to go to price—who has the best price? Yet most people will pay more if they are confident they’re getting more, if they trust the brand, if they feel confident the product or service will deliver as promised. And of course, building a brand is building perceived value.
Think Starbucks. It’s just coffee, right? There was a time when people thought anyone would be crazy to pay $3 or more for a cup of coffee. The Starbucks’ focus on the experience, not just the cup of coffee, created a whole new category and a whole new reason to spend $3 on a cup of coffee … with no free refills.
When you create a context for the idea of your brand, that adds a story and value to what you’re promoting, you’re on your way to building a powerful brand. And a powerful brand allows you to charge more, because you have built in value for the customer.
Where do you start? Start by distinguishing your organization, products or services from others—from the audience’s point of view. What matters to them? What do they need or what do they value?