There is a television commercial where two young men ask the question why are watches so expensive. They then go on to explain that they created a company dedicated to selling low coast watches. Their whole focus is they make good watches that aren’t expensive.
The problem is they are also making watches with no lasting value. The expensive watches they elude to (like Rolex) are generational products. These are things that are passed down from parent to child (and in many cases grandchild and beyond). No one is passing down the inexpensive watch.
The point is that there is a perceived value in a higher cost product that the low-cost alternative doesn’t have. Additionally when you compete on price, your customer tends to be less loyal. They Weill go to your competitor if they offer a lower price. This is also why Groupon, while populate with bargain hunters, has proven to be a losing proposition for businesses. When someone buys a Groupon, they tend not to buy again from the business unless they get another Groupon.
You need to show your product or service has value. A higher price can be asked for a product with higher value and customers will gladly pay it.
To see how a Modern Observer Group coach/consultant can help you differentiate your product or service, schedule a call here.
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