Many business owners that I speak to are firm believers that their customers are 90% if not totally price focused when shopping around for their product/service. Nothing is further from the truth.
Price is really just a reflection of value and value is more that your raw product. Value is really about what your prospect feels they will get when they purchase from you. In my seminars, I use this metaphor to demonstrate the point.
James was a hairdresser who had been running his salon on the Main Street of my town for 7 years now. He was well known by the community and had a great reputation for his consistency, good manner and level of service. He charged $12 for a haircut and felt that his clients were getting a great deal, especially since he had not put up his prices in 5 years.
Business was really cruising until one day he looked across the street and noticed a new hairdresser opening up shop. He thought to himself, “no problem, nothing like some healthy competition, my clients are loyal to me and will stay because of my consistency, good manner and level of service.”
A few weeks went by with very little impact on his business until one day he looked out his front window and to his dismay, saw a massive sign painted across the front window of the shop across the street which said, “$6 haircuts!” James nearly had a heart attack! He knew that there was no way he could compete with $6 for a haircut, his base costs were more than that. This sign spelled the start of the end for James.
After many sleepless nights wondering how he could combat such an aggressive move, James was at a total loss for how he could stop his clients from slowly being converted to using the new hairdresser; after all he just felt that for the difference in price, there was just not enough difference between them. James was seriously considering shutting shop and quitting while he was ahead, until finally the answer struck him in the middle of the night.
The next morning James was up early, he had to hurry to the hardware store to get some paint and brushes, he had spark in his step and a look of confidence and relief as he started to sign writing on his front window. What flash of inspiration do you think James had come up with that had made him feel so secure about his business and keeping his clients?
The sign on James’ window read, “We Fix $6 Haircuts!!!!”
The moral of the story is, prospects do not buy based upon price alone; what they really buy is VALUE and CONFIDENCE- confidence in you and your product.
The question is: How do you demonstrate value and confidence in your product?
Brad Sugars founded the brand Action International in 1993 when he realized there was a disconnect between business advice and implementation. The answer was Action! Brad Sugars created a business coaching company so that business owners throughout the world can realize their goals in business. Today the company is known as ActionCOACH. To learn more about business, visit Brad Sugars Review blog!