Here's a really cool way of looking at a business building principle... I got this from one of the eCleanAdvisor.com tips sent out every Friday.
Beware The Dollar Store Syndrome!
by Lee Pemberton - the Educational Marketing Guy
The Dollar Store Syndrome will crush you when you are a service provider like
we are in the cleaning industry! Lower prices are not going to build your
customer base.
Dollar stores sell commodities, and price is key for commodity sales. So when
selling commodities,unless you're the 900-pound gorilla in a commodity market,
(like WalMart and Target, or the Dollar Stores), you get splattered!
But you can't sell your cleaning services like that. Being a premium-priced
service guy in your town is actually a good thing. Not only does it mean decent
profit margins; it also means more respect for you.
If you are under the impression that low price is a virtue in your business,
it's time to ditch that concept.
Here's the real deal:
Instead of asking yourself: "How low do we have to go to get customers to
buy?"
Here's the real question you should ask:
"How can I add enough VALUE to what I already sell so that people will pay
what it is really worth?"
That's exactly what businesses like Whole Foods and your local convenience
stores have done.
However, these stores are great marketers, and they educate you to their
value and its benefit for you. And they do it constantantly.
There's always a way to charge more. And there are always people willing to
pay a fair price for value received.
Beware The Dollar Store Syndrome!
by Lee Pemberton - the Educational Marketing Guy
The Dollar Store Syndrome will crush you when you are a service provider like
we are in the cleaning industry! Lower prices are not going to build your
customer base.
Dollar stores sell commodities, and price is key for commodity sales. So when
selling commodities,unless you're the 900-pound gorilla in a commodity market,
(like WalMart and Target, or the Dollar Stores), you get splattered!
But you can't sell your cleaning services like that. Being a premium-priced
service guy in your town is actually a good thing. Not only does it mean decent
profit margins; it also means more respect for you.
If you are under the impression that low price is a virtue in your business,
it's time to ditch that concept.
Here's the real deal:
Instead of asking yourself: "How low do we have to go to get customers to
buy?"
Here's the real question you should ask:
"How can I add enough VALUE to what I already sell so that people will pay
what it is really worth?"
That's exactly what businesses like Whole Foods and your local convenience
stores have done.
However, these stores are great marketers, and they educate you to their
value and its benefit for you. And they do it constantantly.
There's always a way to charge more. And there are always people willing to
pay a fair price for value received.
