Price Vs Value, what one is going to help grow your business.
Tricky one this because everyone wants stuff for the lowest price possible and then they want as much of the stuff that for the same price. There is a fine balance and it does depend on your business and what you sell.
I used to have an online shop where I used to import goods from China in bulk and then sell them on eBay. I remember when I first started up, checking out the right niche and seeing what my competition was doing in this space.
I remember asking my mentor at the time what price should I start selling my products for. I was really tempted to just find out what my competition was selling then just under cut them.
I’m glad I listened to my mentor. He said if I’d done that I would just have entered into a pricing war and it would not have helped anyone. What my mentor told me was to actually go in at a slightly higher price but give more value to my customers.
I’d looked at my competition and had worked out a couple of ways that I could offer better value, I even made a purchase through them just so I could experience the value they was offering to their customers.
I chose to offer my customer next day dispatching, this was a big one. My competition dispatched within 3 days so this gave me a huge advantage. I started making sales and shortly I was receiving lots of positive feedback with comments like “Super Fast Delivery” and “Thanks For The Speedy Service”
Within just over a month my new business was flying and I’d started receiving awards from eBay like Trustedseller and Powerseller. As well as all the good feedback I was getting and now the awards, my business boomed with all this added credibility.
You see if I had just offered a cheaper price, there is no doubt my customers would have been happy but they would not have received anything special. It’s because I added this special touch that made them feel the value and want to comment positively. It’s these positive comments that gives prospecting customers the comfort to buy.
It’s from this lesson that I have learned from this is that value out ways price.
Another example where I experienced this was last year when I was trying to sell a $197 for a limited trial price of $4.95. Yes that’s right
I thought they was going to fly off the shelf, how wrong was I. I struggled to shift any at all.
The reason was that my customers could only see the $4.95 price tag and in their minds had already classed it as having little value, so they did not buy. Even though this was a great product and actually valued at more than $197. They would have grabbed a true bargain if they had bought one.
Today I sell many products online, some are $1,000 and some are more but because my customers see the value they buy, then return, and buy some more.
Yes price does matter but never under estimate value.
Where can you add value in your business …