How not to compete on price.

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Marketing is perception. And for many big-name brands, millions of dollars are spent trying to create and control that perception to attract a certain type of customer through their doors. But without those millions of dollars to help shape (or reshape) that same perception, what can you do to create your own? Something that stops you from always feeling as if you have to compete on price, to even compete at all?

Let’s start here.

Find out how others already perceive you and your business. 

Are you considered “expensive?” Or are you considered “cheap?” Are you considered a “great value for the money?” Or do would-be customers consider you as having “superior craftsmanship and quality that you can’t get anywhere else?”

Do they “love the story?” Or do they just not care?

Here’s why that matters

“A brand is a gut feeling about a product or service.
It’s not what you say it is. It’s what THEY say it is.”

-Marty Neumier, author of The Brand Gap

That means, every time another competitor enters the marketplace, and offers something similar, but for less, you have a choice to make:

Change your price. Or alter your perception.

In a recent book that interviewed the CMO of Belkin International, Kieran Hannon, he said when talking about pricing a certain product to compete with similar companies like them:

“The data shows if I reduce the price to fifteen dollars, I would sell an immense amount more. But there’s a lack of understanding it in the totality of what you’re trying to achieve, and more importantly, what it says about the brand. Meaning, how do users evaluate and see the brand when it’s a fifteen-dollar price point versus a twenty-dollar price point?”

You see. It doesn’t matter as much about you, as it does how others perceive you and your brand. What it is you say you deliver, versus what you actually deliver. How you WANT others to perceive you, versus how others really perceive you.

Decide where you want to be.

Ok. So others perceive you a certain way. That’s fine. Now, ask yourself, “How do I want to be perceived instead?”

Do you want to be perceived as a quality product that charges quality prices? Do you want to be able to up your price, instead of lower it? Have people covet your brand, not be indifferent to it?

Now, take a look at those who do what you do (as well as those outside of it), who charge some of the highest prices and ask yourself:

“How do we become better than them?
“What makes us different and special?”
“What do we do that no one else does?”
“What is our purpose/why?”
“What is our vision for our customers?”

Once you know the answer to those questions, you’ll have a clearer vision for where you are, and more importantly, where you need to go.

Communicate your value. And serve your customers.

To not compete on price, you have to not only give value, but also be able to communicate that value to your clients. Plus, specifically know who exactly your clients are that you serve, and second, how you serve them.

What value do you bring to their lives? What goal or problem does your brand solve?

Those are the kinds of questions you need to start asking because to charge a higher price, you need to solve a bigger problem than saving someone just a few dollars. One way to do that is by finding the value it brings using Maslow’s hierarchy of needs. Because the higher you go up on the pyramid, the more valuable you are in the eyes of your customers. And once your product or service is perceived as having more value, in the eyes of your customer, then you don’t have to compete as much on price as you did before.


 
Melinda Livseybusiness