Price versus Prestige
My fifty-plus years of experience have been with businesses generating between $2.5 million and $7.5 million in revenue, providing products that require substantial sales efforts and services that demand both on-site and remote support. With that said…
Next to hiring and retaining employees who best suit your business and customers, finding and onboarding new customers should be a high priority. In a prior blog, I stressed the importance of defining a specific service area and committing to it. My recommendation in a decently populated area is to limit your service area to a fifty-mile radius of your office.
Especially in a startup, taking on any and all customers may not be in the long-term interest of your business. My experience has taught me that prospective customers generally fall into three categories: Prestige buyers (10%), lowest price buyers (10%), and preferred customers (80%) of the remaining prospects.
Early in the sales process, it is important to identify and avoid price-only buyers. How? Ask! A simple question such as:
"Before we get into the features, advantages, and benefits of doing business with our company, let me ask—are you interested in quality products and excellent service, or is your decision based solely on price?"
If they say price, cut your losses, thank them for their time, and focus on prospects who value quality products and services.
Why is it important to avoid price-only buyers? Because doing so will make your business more profitable, and profits are essential for becoming and remaining a viable company. Prestige buyers, on the other hand, typically want to associate with or be serviced by the best of the best, which, as a small or new business, may disqualify you as a potential supplier.
The good news? Avoiding both the price-only and prestige buyers still gives you access to EIGHTY percent of the potential market. Your path to success in onboarding new customers is to identify those prospects, design a marketing plan to capture their attention, and SELL, SELL, SELL!
Keep reading our blog, or if you want to Wright Your Business immediately, book a 15-minute Google-Meet meeting to explore the possibilities.
