How to Stop Competing On Price

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How to Stop Competing On Price

Sick of competing on price alone? Frustrated by clients who question your value? This post will outline exactly how to stop competing on price so you can communicate value and increase your prices. 

Firstly, don’t blame your audience. It’s not their fault… but there is something that you can do about it.

They want it all but don’t want to pay

I recently saw this comment in a Facebook Group. It was from a business owner who felt extremely frustrated by the fact that many of her prospects were requesting every feature under the sun, yet were surprised by the price that went with it.

Oh no, that’s way too much. We can’t afford that”.

We all know that the budget is a huge factor when it comes to investing in your business. If your income is inconsistent, it can be really stressful deciding on whether you should take a leap and give up your hard earned cash.

This is particularly true when it comes to a service-based business and the end result is intangible.

Given that so much importance is placed on the budget, it is not surprising that a lot of business owners feel as though their only option is to continue competing on price.

Charging their worth” is something which is almost thrown out the window because they are attracting prospects who are simply not willing to look beyond the final figure. Competing on price though is not sustainable for your business or great for the confidence levels either.

 

 

So what’s the solution? What do you need to do to stop competing on price?

Firstly, the reason clients are requesting a reduced price or looking elsewhere for cheaper options may be because they are struggling to identify the value of your service.

They are struggling to identify “what’s in it for them”. They are essentially associating the price with the features of your service only, not necessarily the benefits that they will receive e.g. the value for money.

 

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As an example to explain what I mean, let’s have a look at the two handbags shown below.

Image source: ShopStyle Collective

Handbag A is a small shoulder bag with a quilted leather look. It has an adjustable cross-body strap and a brand plaque on the front of the bag.

Handbag B is a small shoulder bag with a quilted leather look. It features a gold chain strap and a logo-embossed lock.

On face value, the two handbags are relatively similar. However, there is one significant difference which stands out a mile away. At the time of writing, Handbag A is listed at a recommended retail price of $49.00. Handbag B however, sells for $2,425.00.

Why would someone choose to spend over $2400 on a handbag when they can get something similar for just $49.00?

Well, Handbag B is a Versace handbag. Versace is a high-end fashion brand renowned for its upmarket, ready to wear and leather accessories. When someone chooses to purchase a Versace handbag, they are not just buying a handbag to store their personal items in.

They are buying the promise of high-quality craftsmanship, rich history and status. They are buying a sense of decadence, opulence, luxury and femininity. Versace has succeeded in capturing the essence of what makes their products unique and furthermore, they communicate that essence in a way that is aligned with their consumers, their messaging and overall brand positioning.

When you can clearly articulate the value of your service in a way that positions your brand as the solution to your customers’ problems, the factor of price doesn’t even come into it.

So, the big question is… How do you communicate your value to your customers?

 

Step One: Know your audience

I know you’ve probably heard this a million times before, but having a crystal clear idea of your audience really is crucial when it comes to articulating the value of your service. Knowing them however, needs to go beyond their gender, age or whether they live in a suburban house with their fiance and 2 dogs.

If you truly want to connect with your audience, you need to be able to go a few steps further and look at their lifestyle, behaviours and most importantly, what they value the most in relation to your product or service. People generally respond when they feel as though they are understood.

 

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If you have a solid understanding of the problem they are experiencing (in relation to your service) and can articulate this in a way that connects with their emotions, this consequently encourages a level of trust and confidence in what you have to offer.

Although identifying your ideal client can be an ongoing process, having an initial foundation to work from will allow you to attract and connect with people who are aligned with your message, brand and business values.  

 

Step Two: Identify how your audience perceives value

In order to communicate value to your audience, you must first be able to identify how they actually perceive value when it comes to your service.

Let’s use a wedding photographer as an example. As a customer, the first thing I would be looking for is an emotional connection to their work, brand, and website. Wedding photography is all about capturing special moments throughout one of the most important days of your life. I would want to know that my photographer has knowledge of how to do this in a way that connects with me.

Trust would be another important factor. Photography is often one of the biggest investments during the wedding planning process. I would want to know that I can trust my photographer every step of the way and that the experience would far outweigh the investment. A structured service process which sets clear expectations from the very start and a high level of professionalism would be vital.

These are just a few examples, but most importantly, when you can identify how your audience perceives value, this can then be conveyed throughout your brand messaging and incorporated into your overall process as soon as a new prospect lands on your site.  

 

Step Three: What are the benefits of your service?

To put it simply, your clients aren’t interested in the features of your service. Let’s go back to the wedding photographer. Have you ever heard a newly engaged bride say, “The one thing I would really love in a wedding photographer is for them to offer 4 hours of coverage”?

If you really want to stand out, you need to be able to connect with your audience as soon as they land on your website. This requires you to be able to communicate the benefits of your service in a way that triggers an emotional connection.

A wedding photographer will generally have a range of packages which they present to their clients, varying in coverage time, the number of images supplied and maybe a few additional elements like a 1-2 minute slideshow, featured blog post etc.

Now, don’t get me wrong, these are all important features of the service. However, what your clients are really in search of are the benefits of your service – the experience associated with what you have to offer; the emotional outcome of hiring you as the service provider.

As harsh as it sounds, they don’t really care about the number of hours the photographer has to put in on the wedding day or afterward as they edit the photos. They’re not really looking for a featured blog post or a 1-2 minute slideshow of their wedding day. These are just features.

If you really want to connect with your audience, you need to describe each service feature as a benefit and ensure that it is aligned with how your clients perceive value. For example, a 1-2 minute slideshow becomes a lasting memory of their special day; a beautiful keepsake that they can share with their children down the track. Make sense?  

 

Step Four: How does your audience process information?

This step requires you to go beyond the question of which social media platforms your audience is on.  It is more about how you deliver information or communicate with your audience on a one on one level. To create true value, you must be able to identify the sort of communication your audience will really appreciate.

If your customer values a personalised service experience, creating generic newsletters is probably not going to connect with them. They want to feel as though you are talking to them only. They want to know that you can understand and relate to their individual situation.

In addition, a personalised connection can also be established through simple emails that you send to your clients. Rather than simply sending an email outlining the facts, showing a genuine sense of passion and excitement towards their wedding will help to create an impact.

Let’s use the example of a wedding stylist presenting a proposal to her client. Instead of simply describing the visual concept for her clients’ wedding day, she could incorporate the reasoning behind certain elements and describe how they specifically relate to her clients’ values and vision. In turn, this will convey a level of passion, understanding and care. This is what will create a sense of value in her clients’ minds.

Think about what your customer appreciates and how you can create an emotional impact that is aligned with their values, beliefs and behaviours.

 

Step Five: How do you create value for your audience?

Once we have a solid understanding of our audience and the benefits of our service offerings, we need to be able to adapt our brand message so it is aligned with our dream clients’ attitudes, values, and beliefs in relation to our product or service.

The most important thing to remember is that we must be able to identify the specific types of content that are going to connect and encourage them to take action. Therefore, simple and consistent messaging, visuals and creating a memorable impact through an emotional connection is extremely important.

If we’re using a wedding photographer as an example again, we know that our audience is in search of an emotional connection to our service offering. This needs to be established or at least triggered before they get in touch with us.

Incorporating storytelling into your brand messaging and placing the reader at the forefront, will allow them to “put themselves in the picture” and trigger emotions that relate to what you’re describing.

We’ll be there as the excitement builds in the lead up to one of the most important days of your life. As you sip celebratory champagne with those closest to you, we’ll capture every heartfelt moment and happy tear as you reminisce on first dates, first kisses and what has led you to this moment in time with the love of your life…. etc.

Well done for getting to the end of this blog post – it was a long one!! If you’re sitting there thinking, ‘wow, that seems like a lot of work’… you would be right!

However, if you’re willing to put in the work, communicating value to your audience is how you can stand out from your competition and most importantly, attract and book clients who value your expertise, skills, and knowledge.

Competing on price is simply not a sustainable business model. And let’s be honest, you deserve more than that. Your business deserves more.

 

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