One of the keys for a successful business is to develop the ability to charge prices that are higher than your competition and still make sales. Without this ability, you’ll be forced to keep your prices rock-bottom, and you’ll be forced to lower them further each time a competitor undercuts you. Unless you are able to sell at a huge volume (which most small businesses can’t do), the low profit margins you earn will make it difficult to make a living, let alone build a thriving business.
So how can you charge higher prices and still bring in customers? The key is providing value above and beyond that which is provided by your competitors. Here are four ways to do this:
Emphasize customer service. Don’t just provide customer service, provide AMAZING customer service. Clients will be willing to pay extra for your services when they know that you’ll work with them until they are completely satisfied. This is a particularly effective way for a small business to distinguish themselves from larger businesses who are often able to offer low prices.
Provide information that nobody else has. Whether it’s insight that you’ve gained from your position in the market, or simply experience you’ve gained from years in the business, providing information to your customers dramatically increases your value. Do you own a landscaping company? Tip your clients off about a great new bug-resistant tree. You might not get paid for it on the spot, but they will appreciate the information and will be willing to pay a bit extra each month for a company that keeps them informed.
Emphasize packaging. If you provide physical products to your clients, consider the packaging that you use. The packaging creates the first impressions customers will have, are they going to perceive your products as cheap? Or will they perceive them as valuable, elegant and important? Apple does a great job with this, their iPhones and other products are carefully packaged to maximize their perceived value. By increasing the perceived value of your products, you can charge higher prices to your customers and still leave them feeling like they got a great deal.
Develop partnerships. Clients want results, they don’t want to hear “sorry, we don’t do that.” Develop partnerships across your industry and outsource jobs, or refer customers outright. That way, your clients begin to see you as a great resource… and they’ll be willing to pay higher prices because they know you’ll come through for them.
The ability to charge higher prices than the competition and still win business is critically important. At the end of the day, it’s all about the value you provide… so make providing value to your customers a top priority!