by Danielle, President
… Or at least, don’t lower them.
In a trying time of slow economic growth, it’s easy for business owners to fall into the death trap of trying to compete on price alone. I’ve seen many of our clients have a competitive edge — the most advanced technology, the smartest team, the fastest turnaround or the highest quality widget — but still want to lower prices to stay competitive.
Competing on price is a deadly mistake.
First, there is always someone around who can offer an even lower rate. They’ll cut corners, they’ll offshore… but they’ll do it cheap. As a result, you are under constant pressure to keep reducing your price. If you’re lucky, your business is still afloat but it’s unsustainable and no longer fun to run.
Secondly, sometimes competing on price is unnecessary. What benefits do you give to your customers? Where do you have a longer-lasting edge? If you’re any good at what you do, if you deliver excellence and quality… you should be able to charge as much as your competitors and probably — even more.
Finally, the customers who are attracted to the lowest price are not the ones you want. It’s painful and difficult to turn away difficult customers, but it is also liberating. Fair prices will weed out the problem clients. Remember to reward your current clients who gladly pay your fees with discounts and other perks, too!