I have too many friends who start or seek to turn around a flailing business, using the price reduction principle as a guiding light.

It would be a mistake.

Why Price Reductions are Bad Positioning for Business

“How many things in your life do you do automatically, routinely, that is a waste of time, but you don’t take the time to remedy them?” -Robert S. Scott

I always discuss this with my Douglas County business owner clients — how to price their services. Consumers often say, “Well, I would buy it if it were in my price range.” And that idea tempts many business owners to lower their prices–to sell more products.

However, as you already know, price reductions sometimes create more problems than they solve.

For example, price reductions…

Decrease net profits
Lead to the purchase of lower-quality products
Increase customer demands to drop the price even lower!
Require even more sales to make up the difference in revenue
Need a larger quantity of products

Someone will always be willing to go out of business faster than you.

Remember this: the price is not a benefit. The cost of your product does not determine the close of a sale. If you truly “sell” your customers and prospects, they will purchase your products/services no matter what price reduction you implement.

That’s the plain truth — and you’ve probably seen it in your purchase patterns.

If a customer or prospect doesn’t buy — and they claim the cost had something to do with it — you can guess they probably wouldn’t have purchased anyway.

As a small business owner, and marketer, your job is to sell your products and services. But the actual art of selling has nothing to do with the product’s price.

When your contacts find out about the price, they should be determined to purchase no matter the cost.

So, find “real” benefits (value) to sell to your customers and prospects. Help them to see how great their life is with your product, and you’ve got a customer. Point out their pain, and your contact will do anything to eliminate it.

Set your prices and hold fast. If you’ve marketed correctly, customers will still be anxious to do business with you.

Price gouging is horrible, but that’s a bogeyman that lives more in our heads than in real life.

Charge your worth. You deserve it.