Business owners continue to be challenged to reduce their prices and in many cases reduce their margin. When the product you are selling is not a commodity, it is your responsibility
So actually what is this value, how would you define this concept?
The Value Formula: Value = Benefits – Cost
Please note this down somewhere prominent and when a member of your team asks you if they can discount – point this out to them.
As a business owner, it is important for you to add VALUE for your customers.
You can achieve this by reducing the cost or you rcan do it even more by increasing the benefits that they will get. Either way, the value for the customer increases.
Reducing the Price is the QUICK Fix and you will find yourself repeating it time and again.
Increasing the Benefits needs to be learned, taught and understood but once it happens it will actually benefit your for ever because your team will understand.
The price is what your customer will pay, the value is the benefit that they derive from the product. There are benefits associated with the buying process, the peace of mind associated with doing business with you, the follow up or after sales. there are a number of ways that you can add value.
When you reduce the price for the customer, you do improve the value they get in the immediate short term, BUT you greatly reduce your own ability to build value into that customer in the long term. Coupled with the fact that the customer is of less value to you. You reduce your ability to nurture and look after them as well because you have less profit in your business. DO you really think they want that – especially if there was an opportunity for you to add real value.
People remember the value and experience the benefits of a product long after they forget how much they have paid for an item.
If you would like to find out more about improving the margins in your business, hit reply and request a free assessment.