How to Stop Cutting Prices and Start Making More Money

wad of cash

Cutting prices is a common strategy to get more sales. Department stores are doing it. Auto makers are doing it. But, it’s a race to the bottom. You cut prices. Your competitor cuts prices. You slash them again; so does she. Meanwhile, a third company outsources their production and undercuts both of you.

There will always be someone in some underdeveloped country somewhere willing to develop web sites, take photos, or create brochures for a tiny fraction of what you need to charge in order to eat.

If you’re in a developed country, you can’t win against someone who can work for $5 a day. And, you shouldn’t try.

Even if you’re competing against the guy down the street, you still can’t compete on price — it’s a death spiral into bankruptcy.

Offer Value

Make your product so compelling, so overwhelmingly worth every penny, that the price is secondary. Add more value (bonuses, checklists, tutorials, how-tos).

Be Remarkable

If you’re worth talking about (wow, he’s the guy with the biodegradable exhibits!), people will tell their friends, who will tell their friends, and so on.

Think Different

Whatever you think of Apple, they’re thriving, even in a down economy, with high prices. They offer an experience, ease of use, and even a sense of belonging to a tribe, that other makers of electronic gadgets don’t. I’ve never heard of an HP tribe, have you?

Convince people that your product is WORTH it, and they won’t care what it costs. They’ll want it.