Far too many new business owners think that the only way they can be competitive in the market is to sell their products at a drastically reduced rate. When you consider this, it makes sense at first glance. Your rivals have been around a while, while you’re the new kid. The competition has been able to establish a customer base, while you have far to go. Everyone knows your competitor’s name, but they’ve never heard of you. This all leads to the assumption that you have to discount your products to gain a foothold.
Price Is The Only Part Of The Marketing Mix That Does Not Generate Costs
Setting a higher or lower price will affect your profits and potential to generate revenue, but it doesn’t cost anything to set a price. Most consumers assume that a lower price corresponds to significantly lower costs, which is considered a sign that the quality of material used is lower as well. Generally speaking, it creates a negative consumer perception of your product.
The Problems With Setting A Low Price
The most obvious problem is that you won’t make nearly the amount you normally would. But, what’s more, you have to remember that customers don’t make purchasing decisions based solely on price. They purchase products because there’s a certain amount of emotion attached to either the product or to the company that offers the product.
A Solution: What To Do Instead Of Lowering Prices
So what does this mean for you? Instead of reducing the price (and worth) of your product, try to find a way to connect emotionally with your customers. This is easier said than done, but when you know how to do it, the process becomes easier.
The first thing to do is put your name in the public eye and make contact with prospective clients. A customer just can’t be emotionally attached to a business that they’ve never heard before. Invest in good, quality print ads and post them everywhere your potential client base does business. Make a few posters, and place them in areas with the greatest foot traffic. Write up a few appealing brochures, and make sure your business cards are available everywhere. Send out direct mail ads to anyone who might take an interest in your products or service.
As soon as you’ve established solid contact, the trick is to keep those contacts fresh. This is crucial to forming an emotional attachment. Basically, the only way your clients will form an emotional attachment to your company is if they hear from you (and about you) regularly.
To extend your contact list, make and keep an updated list of current and prospective customers, then create a newsletter or other material that gives those customers insight into your company and production line. Try not to concentrate on length; just make sure the quality is sound. Think about what kinds of things might appeal to your customers’ emotions. Send your newsletter out to each address you have. Wait a little while, see what kind of responses it receives, and repeat the process. Consistency is the key to success here.
Consumer Engagement Is Impacts Perception Positively
Maintaining regular contact with these customers, whether they’ve purchased from you or not, will go a long way in helping them remember your name when the time comes to buy something. Forming an emotional connection will help you generate sales. If you effectively build an emotional connection, you won’t have to resort to cheapening the worth of your products because those customers will understand what its real value is. In fact, you may even get away with slightly increasing prices this way.