I happened to run into a website of a local concrete finishing business here in my state of Virginia today and the largest and most visible text on the page read:
Lowest Price Guaranteed!!!
I’m sure you’ve never seen that advertising line before, have you? But seriously, the phrase Lowest Price Guaranteed, along with the equally infamous ‘100% Customer Satisfaction’, are the most over-used and possibly dumbest advertising statements made around the world today. In fact, instead of saying Lowest Price Guaranteed, businesses should just say:
Our products and services stink but at least we’re CHEAP!
As everyone that reads this blog on a regular basis knows, my business by day is that of pool guy. I own a large swimming pool company that does a substantial business throughout Virginia and Maryland. This being said, the idea of me telling any customer or person that we have the lowest prices Guaranteed is as about as likely as Republicans and Democrats having a picnic together on the White House lawn.
What the heck is up with businesses that actually have the goal of being cheap?? I frankly can’t fathom the idea. Lowest Price Guaranteed is a business model destined for failure 99% of the time, especially in cases where the item in not a commodity.
Let’s look at this concrete company I referred to at the beginning as an example. Instead of trying to establish a brand of quality, excellence, value, etc….they instead want to be known as ‘the cheap guys’. Such a philosophy only leads to one thing—having to sell and do more to make the same amount of money as better and more branded companies.
For example, let’s say this concrete guy averages $1000 profit per job with his low rates. Let’s also say that his competitor, who is known for higher rates, reputation, and quality averages $2000 per job. With a model as basic as this one, you can see that Mr. Cheap Concrete Guy is going to make the exact same amount of money on 100 jobs as Mr. High Quality/High Price Guy with half the work and headaches. I don’t know about you, but I’ll take the 50 jobs and take 6 months off a year!
But sadly, most businesses elect to be Mr.Cheap. They brag about their low prices. And before you know it, their business has failed because they had to do such much volume just to make ends-meat. This, my fellow readers and entrepreneurs, is a dumb, dead-end business model.
So my question to you is this: Are you known as ‘The Cheap Guy’? Do you brag about your low prices? Or do you focus on building your brand through exceptional quality, service, and killer branding/marketing? One thing is for sure, your company is swinging in one direction or another, and hopefully you know what that direction is.
Build value. Teach to anyone who will listen. Give more than anyone else is giving. Push harder than anyone else is pushing. And then ask for more than anyone else is asking.
As always, I invite you to leave your thoughts and comments below.
{ 6 comments… read them below or add one }
G’Day Marcus,
Well said mate. Reminds me of that old adage from sales training; ” The person most concerned about the price is the salesperson.” There’s a post on my blog too about getting staff to understand that ‘value” is more important than price.
I noticed that’s there some excellent stuff about value on the current Huthwaite newsletter. Really worth a read and a view.
Make sure you have fun.
Regards
Leon
Great point Leon….such a focus on price can be a deadly animal, no doubt. As always, thanks for stopping by my friend.
Hi Marcus,
This is so true, all to many companies work on lowering their prices to get customers to take the step and buy their product instead of just working on creating a image of excellence.
I actually wrote an article earlier that completely agrees with this one:
http://lookingtobusiness.com/sales-process-sales-plan/how-to-sell-more-products-at-a-higher-price-by-providing-real-value
If companies could start paying attention to what their customers really wanted and start marketing to that point, lowering prices would never be necessary.
//Daniel
.-= Daniel M. Wood´s last blog ..Here is a Method That is Helping People All Over The World to Accomplish Their Goals =-.
the democrats wanted to have a picnic n the white house lawn but the republicans said NO…. hahaha
Hey Marcus good post. I think that “Lowest Price Guaranteed” works great–for some products. For your business it would not be good, I would feel better paying for someone I trust more.
For other products like groceries and retail items, I would be more likely to go somewhere if it had “Lowest Price Guaranteed” advertised. Maybe I’m just weird or it is my cheapskate tendencies that run in my Irish blood.
Kevin
I wouldn’t say you’re a cheapskate at all Kevin, as commodities are certainly different than services….Irish ey? Very nice