Buying cheap and thinking you are going to make savings is marketing con number one. The consumer often only ends up buying an inferior product that will either break, not do the job properly or look like what it is – cheap!
How often have you used that stapler and thought “I should of spent the extra and got a Rexel.”? I know everyday at work I wish the company had bought the one that does the job properly and lasts daily use in a factory environment.
The same goes for all manner of things in your business, from your office printer to your insurance company. Quite often such things are cheap for a reason and do not offer real value. You end up out of pocket as you buy yet another printer that has only lasted a year, or the cheap monthly payments made to that insurance company, mean them using some small print to not make full payment on a claim you make.
Are You Selling Your Business Cheap?
Many business owners will often watch their competitors prices to ensure they match them.
You always see this in TV advertisements, especially with supermarkets. ASDA have an advert saying that like for like their products match or beat Tesco. This I imagine works very well for supermarkets, but I want you to imagine you are local grocery store for a moment…
Dave’s Fruit & Veg shop across the road reduces the price of his tomatoes. You notice this and respond accordingly. All is well, but you decide to change supplier to help manage the profit margins because the original tomatoes you were selling were more expensive. After a few weeks you find the tomatoes are not shifting as well as they use to. Even one of your regulars Jane has stopped buying the tomatoes. She happened to once be a customer previously at Dave’s Fruit & Veg shop before she started buying from you. So you ask Jane “Why no tomatoes anymore Jane?”
Jane explains that she enjoyed the tomatoes you sold previously and now they are no better than Dave’s tomatoes. Her husband who works out of town stops off on the way home every now and then to buy some of better quality. She also adds that even though you sell some of your goods fractionally higher than at Dave’s Fruit & Veg shop, your produce is typically better tasting and condition and that is what made her change her local grocery store.
As you can see, selling cheap does not always mean more customers and more money! One of the things I see Jim Connolly say time and time again is “Add more value rather than lowering your fee” (Well ok, he may not say it all the time, but it is a theme that resonates through many of his blog posts I believe). If you are like myself and wanting to learn more about marketing I suggest you check out Jim’s blog to ensure you are not selling yourself cheap!
To end, if you are having to sell ‘cheap’, you really need to set expectations of the customer so they understand it is just that, a cheap product that does the basics. It they want all singing and dancing, they have to pay the extra but it is worth it because they get so much more value for their money.
Do you have any examples of buying cheap or selling cheap, and later regret doing so?
Photo credit: Matt Biddulph