Jenni from the Quick Books Self Employed Community says the following:
“I always feel like my prices are too high, yet when I see my competition, their prices are almost double mine. I know my product is at least the same quality if not better, but I have have yet to sell anything.Not sure if it is pricing or just networking issues”
Our Advice to Jenni
It’s not just pricing or networking issues, Jenni. There’s more going on than that. If you know you are offering great value and your competition is charging twice what you are and making sales you could have one or more of the following three problems:
- You’re talking to the wrong potential target customers and need to find the right group who are already buying your type of product or service
- You’re not doing a strong enough job articulating why your product is better than the competition’s. This is a marketing problem that’s easily fixed.
- You’re charging too little and potential customers think there’s something wrong with the product. This is also a marketing problem that’s easily fixed. Raise your price and see what happens!
The other challenge is, you may not be reaching a large enough potential audience to close new business. How long have you been trying? What does your marketing strategy look like?
In the next two weeks, test these three things:
Narrow the focus of your potential customers. See if you can get traction in a particular geography or with a particular demographic (women, males, generation, or ethnic group)
Find out where this group congregates and show up there. Meetups, conferences, chambers of commerce meetings are great places to meet potential customers for a low entry cost.
Raise you prices to 20% below your competition and see if anyone bites. If they don’t, you’re no worse off. If they do, you just bought yourself some heavy duty gross margin that will help your profits and cash flow.
My book Accounting for the Numberphobic; A Survival Guide for Small Business Owners will take you through this kind of analysis step by step.
Illustrated by Disney artist Ron Bucalo, it’ll make you laugh and could just change your life.
Do you have a question? Ask me and I’ll be happy to post a response here at Best Small Biz Help.com
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