Ever since the introduction of daily deal sites like Living Social and Groupon, customers have saved bundles of money on nearly any product or service. However, these discounts usually come steep, largely unspoken costs known as daily deal fatigue.
Daily deal fatigue burns the frugality candle at both ends, affecting both customers and business owners. Customers find they pay only about half the price, only to discover frazzled business owners and employees give just about 50% of the expected experience.
Daily Worth’s MP Dunleavy wrote about the daily deal fatigue she experienced after paying for a cut and color service at a local salon running a social couponing deal. Then there’s the bakery that was forced to uphold their Groupon bargain and make 102,000 cupcakes at a 75 percent discount. They lost an extra $20k in the process due to expenses and wiped out a year’s worth of profits.
Is Your Business Price Sensitive?
You are an entrepreneur. You are in business to make money. Your prices are a reflection of the quality of work you provide through your products or services. Your job, when you’re not providing those products and services, is to protect the integrity of your business and your brand.
Whenever you allow other people to lower your prices first and then consent by accepting their offer, you’re dishonoring yourself as an entrepreneur and minimizing the respect your customers have for you. This also holds true if you’re discounting to match your competitor’s prices.
Discounts aren’t bad for business; not even daily deal discounts. Discounts are a great way to get customers in the door when you’re strategic about how you integrate them into your sales and marketing layouts.
Discounts aren’t the problem; wreckless discounts are.
Wreckless discounts cultivate bitchassness – from YOU and your customers.
Price Sensitivity: “F**k You, Pay Me” Resentment
At the end of the day, you do yourself a further disservice because not only did you take a loss on your business, but your product or service suffered due to your attitude. Since you weren’t producing your work at your highest level of efficacy, your product/service in that customer’s mind doesn’t stand out amongst it’s competition. If they ever recommend you, it won’t be because you’re great. It’s because you’re cheap and easy to bargain with. So you’ll attract, if any, more customers who come to you with the same attitude you loathe, which will only undermine your profit potential and destroy your ability to enjoy your work.
How to Get More Customers Willing to Pay What You’re Worth
Sexy Focused Ambitious is not about cookie cutter “how to do social media/blog/marketing” posts; rather it’s about innovating your business, your marketing – and your mindset – by identifying your personal and professional value so you can share your gifts amongst your own tribes. In other words, my goal is to transform you into a purple cow.
Purple cows cows turn heads, demand attention, and are exceptionally memorable. As a purple cow, you’ll clearly demonstrate value, and attract the best customers: those who are willing to pay your price without hassle – and love what you do. You’ll earn more and work less – which is exactly the reason you went into business for yourself in the first place. Right?
In order to become a purple cow, you have to clearly define your target audience. Who are your customers? What do they look like? What are their problems? What keeps them up late at night? If they were to wake up in the middle of the night because of their issue, what is the most troubling aspect of it all? What kind of music do they listen to? What else is going on in their life that’s important? In a down economy, you have to put some work into determining who you’re talking to.
After you’ve figured out who your audience is, you have to determine your CPB, or Consumer Purchasing Benefit. What is the unique benefit your audience receives from using the products and services you promote, sell or offer?
Seriously, think about it. What good is it that you’re able to seduce the customer to seeing you as the one to buy from, when they don’t know what greatness they will obtain as a result of getting YOU to help?
Once you’ve defined your audience and your CPB, then you can truly define your USP – or unique service proposition. Your USP will clarify exactly what it is you do that your industry peers don’t (or that you do better than them), and gives you a foundation upon which to build your business offerings.
Great marketers like Dan Kennedy have always coached the need for entrepreneurs and business owners to position their products and services in a manner that nobody else does to create a unique niche in the marketplace for them. When you effectively do this for yourself, you’re able to really stand out to prospective clients because they’ll say, “Wow, I have to hire this guy because does he do things I haven’t seen anywhere else, but I’m never going to find anyone else who does it this way!”
Granted on a final note, I am always of the assumption that anything you create or produce is always of the highest possible quality. If you’re doing everything can to make customers respect your price but they have legitimate issues with the quality of your work, then they’re not price-sensitive – you’re just not up to par. It sucks to hear, and it happens to everyone at some point or other. If this is the case, and you care about improving your quality, use customer feedback to reshape your production in the lab and come back with something that’s up to standard for them. (You’ll hate them – and me – now, but you’ll end up thanking them later.)