Too often a small business owner tries to compete on price rather than value. Price is indeed an important factor in consumer buying decisions. However, it is not the only or the most important one. If you are not emphasizing your product or service value to your customers, you could be losing potential value-based revenue.
Studies have shown that when consumers are presented with a product with even a “perceived” value over another, they are willing to pay more for it. For instance, being told that chocolate bar #1 came from a fine Swiss chocolatier, and chocolate bar #2 came from an unknown bakery in Virginia, a customer will perceive chocolate bar #1 as having more value and thus worth more money.
That doesn’t mean you should lie to customers to create value that isn’t there. However, you can find the ways that your product or service has extra value and use that to price it accordingly.
Here are a few ways you can help sell better value:
First Rule of Value: You Don’t Determine Value – Your Customers Do
This rule is very important. What you may see as extra value may be worthless to customers. Ultimately, it is the consumer who determines the value.
For instance, say that you have noticed that more and more people complain about the poor quality of mops. The mop handles may break, the materials deteriorate, or they may simply push dirt around the floor rather than clean it up. You think of an idea to improve the mop so it is built with better quality, cleans better, and lasts longer.
It was through the consumer that you found what value they wanted. Listen to what your customers say. Design surveys. Do what it takes to find out what value the customer wants first, and then do your part to deliver it.
Highlight Your Strengths and Experience
One way to set yourself or your small business apart is to highlight your own strength and experience, particularly if your sell a service based on your skills like a financial advisor, a plumber, or business consulting.
Value for the customer comes in the form of your own unique experience. Do you have special training or tutelage? Perhaps you have quality credentials from an Ivy League university? Have you been practicing your business niche for 30 years? Or perhaps your company uses a high-tech state-of-the-art facility that is a cut above the competition?
Use these types of strengths to add value to your own products and services.
Leverage Your Company History
A small business that has a long history of success is certainly worth the extra value. Are you running a 2 or 3 generation family business? Perhaps you started your company 40 years ago before any other local competition came along and are still running strong. Consumers value a company that is strong and has a long history. Use it to your advantage.
Show How Your Service/Product Stands Apart From Competition
When a consumer sees products or service as equal, they will choose price. Don’t let your own offerings compare equally. Find the ways that make your business products stand apart.
As an example, does your competition offer a one-year warrantee for their product? Perhaps you can offer a two-year warrantee. Or offer free product repair and maintenance for a certain term. You could even offer a replacement guarantee that your product is free of defects or deficiencies.
If you want to sell more than your competition, you have to offer more than a better price. And you can even charge more for the extra value you add to your products.
Don’t Hide Your Value
One mistake that many small business owners make is adding extra value, but failing to demonstrate or reveal it to the customer. For instance, say you use a special galvanization or other protection process for your metal product. That extra step costs you money, but it makes the product more valuable. Don’t hide the fact from your customers.
Or say that in your restaurant you use only the finest vegetables grown in your own local garden. Do your customers know that what they are eating was just picked this morning? Be sure to let them know!
The value your business adds to any product or service is worth more money to your customers. Be sure you do not short-change your business. Sell the value and not just the product.