What Business Strategy and the Law of Attraction have in common
abril 22, 2014Selling is Human series: Why the customer is King and we are all in sales
mayo 22, 2014
A common strategy for new businesses is to position their products or services as the cheapest ones in the market, thinking that this will help them grow faster.
The flaw in this plan is that the premise under this logic is that people only care about price when in reality, the truth is that people care about value.
What is the difference between price and value?
While price is just the numbers after the $, value is the benefit obtained for the amount effort that you give
Value = What you get/ what you give
What you give: money, time, effort, commute, easiness or difficulty of use
What you get: benefits that the product offers (always compared to what the competition offers)
When making pricing decisions, you always have to keep the value in mind. Shampoo A might be more expensive than shampoo B, but if it will make your hair shinier and it is made with natural ingredients, it offers more value than B.
Having the lowest price can be counterproductive since people can assume that you are also giving them the lowest value, people then to think if this product is so cheap, it must be low quality
