If you’ve started a business, or a personal brand with a price orientation, chances are you will not be in it for the long haul. It takes courage and guts to have a successful business. The type of clients you attract determines how long you stay in business. Many apply cheap pricing models only to attract disloyal customers, clients with money problems, clients with a scarcity mindset, and those who will never appreciate your value. You will struggle to retain them, make profits, compete, and attract the right clients.
Putting a cheap price tag on yourself, your brand, or your business will attract people who see you as an option. They know they can get what you offer elsewhere, perhaps at a cheaper price. Many people have the same brand, product, or service you are offering. Everyone interested in what you offer knows other places they can get. If you choose a cheap price strategy, your clients choose you based on convenience instead of value.
No one buys something cheap with the intention of having it for a long time. When we lose our expensive phones, we buy a cheap one not as a replacement but as a phone to keep us aloof when we wait to buy a replacement. People don’t perceive cheap products as things to hold on to for long. They know, they will have to lose the cheap product at some point. In most cases, they will demand a price lower than what you are offering because they are buying to fulfill a temporary need.
Selling on a cheap price card is a gateway to a man-eat-man kind of game. A win-and-lose mentality is the order for any business that sells on prices. The man who uses the cheaper price card to do business is primarily after money and their clients know. He scares value-based customers and attracts customers who want to protect their money and get what you are selling as well. The latter customers will not release money unless they feel they are winning. Transaction between the business and the clients will be a tug of war. On one end is one who is losing and on the other, the winning side. Selling on cheaper prices is a model founded on scarcity. The one selling and the one buying will perpetually be at war because they think money is scarce.
You give your clients the power to run your business when you sell at cheaper prices. They will determine your profit margins. You will spend most of your time chasing them, including those uninterested in what you offer. Any client you chase is not yours. Leave them. You want customers who understand your value. Clients do not come to your business because your products are cheap. They are attracted to what you are offering when they know your products have value. Instead of chasing them, you will be attracting them. Any clients you successfully get after chasing will cause your business problems.
If you align your business and products with your value, purpose, and goals, you will attract the wrong clients if apply the cheap-price business model. You want customers who will understand what you are offering and meet the price you have put. The clients you want will know you have a poor understanding of the products you sell and they will not buy because they want both you and your product. The ones who buy only take advantage of your ignorance and will continue to do so until you learn the value of what you are selling. You will also have entered a pool of people who will not appreciate you or your product, no matter how valuable it is.
Cheaper prices do not guarantee affordability. The price you set for your product or service attracts customers who understand the value you bring and the price. Using the cheap price tag attracts clients who can’t meet the price you put in no matter how low you go. Low prices attract clients with money problems. When you buy a cheap phone after losing your expensive one, respectfully saying, you have money problems. If you are selling cheap phones, a number of your clients will buy your phones to use them for a short time. A person with money will not go for a cheap phone. They will replace their expensive phones almost immediately. They understand the value of the expensive phone and they can afford it.
A price-based client will never be loyal to you. Their eyes are always on the price. The ones you have will run from you when they have a cheaper option, which eventually comes. The cheap price tag is popular with high-volume businesses using sophisticated systems to keep their prices low. Selling at a cheap price is buying a ticket to compete with such a business. You will lose the competition, your clients, and eventually your business.
Selling at cheaper prices will never retain a business or attract many clients. Your business will eventually fail if you apply this model. Your clients will never understand the value of your products or services if you sell them at a cheaper price. They might come, but they will not stay for long. They will only buy from you because you are the best option at the time. When a competitor with a better option comes, your clients will run from you. You want loyal customers, those who understand your value, and those who do not have money problems.
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