Selling on price sucks. It’s a hard way to grow your business when someone else is undercutting your prices.
Professional services firms get undercut by freelancers and independents. Manufacturers get undercut by cheap offshore options. Every industry faces some force that’s willing to offer a comparable service for less.
Great brands rarely grow out of price wars. Rather discounts and promotions erode and destroy brands, because they train customers to look for something cheaper.
What are you training your customers to do?
I fly on Porter Airlines, because it’s a convenient, well run option to travel from Toronto to New York. In almost every way it’s a superior experience from flying the major carriers. But their marketing has trained me to wait for their ticket sales.
Every couple weeks they seem to run another 50% off promotion. I’ve come to expect these deals. I don’t fly with them at full price anymore, because I know there’s always another deal around the corner. I may prefer their brand, but my buying habits are driven by their promotions.
Selling on price shapes buyer behaviors. When your customers learn to expect promotions and discounts they’ll wait for them. Even if they have a burning need, they’ll wait for the sale.
Deliver trust over price
Seth Godin writes in his latest book, The Icarus Deception, “doing a good job at a fair price is no longer sufficient to guarantee success. Good work is easier to find than ever before.” (If you haven’t read the book yet, pick it up. It’s a wonderful manifesto of how to thrive in 2013 in the Connection Economy.)
We live in a world of too many options, the challenge is to find companies that go beyond average. Your customers are looking for companies that value a relationship, deliver a well-thought out service, and offer clear expertise. They are seeking out companies that take pride in their work, and behave more like artisans than factories.
Price is a basic value proposition. It doesn’t engage the emotions or the mind. Trust is the higher calling that forms the foundation of a sticky brand.
Trust starts with a relationship
Discounts, promotions and cheap prices are shortcuts. Anyone can offer them. And if anyone can do it, you can’t grow a sticky brand.
Trust takes time. It doesn’t form overnight. It’s built up over multiple interactions, and by continually demonstrating your company is committed to being more than average. This investment in your customers is a powerful brand differentiator, because they learn to trust and expect what makes you different versus what your services cost.
