How to charge more for what you currently do
STOP BEING COMPARED TO COMPETITORS
How do we avoid customers drawing our products and services into comparisons that result in us having to fight on price?
How do we instead attract customers that see the value in our products and services and are prepared to pay what you ask?
The answer is that we have to learn, through positioning, branding and marketing, how to stand out from the competition rather than fit in. There is a natural inclination to try and be safe with the business decisions we make thinking that this will provide the best opportunity for success.
To be ‘safe’ is to be boring, to be unoriginal and the result is that we end up looking exactly like our competitors. This attempt to be successful through bland decision making ensures that we build a business that makes us directly comparable with competitors.
Businesses that are compared to competitors have no choice but to fight on price as they are commodities in the market. Commodity businesses are replaceable, they are undifferentiated and attract price-driven customers.
Businesses with products and services that are unique, differentiated, and bold are able to attract value-driven customers. These products and services stand out and avoid being drawn into a comparison game with competitors. It is these products and services that are positioned for rapid growth and big profits in today’s option rich market.
It is for this reason that we must prioritise courageous positioning to inform how we develop our products and services. Effective positioning is not just about who we target but actually influences what we do and how we do it. This allows us to avoid being and developing another ‘me-too’ product or service.
To do this we must understand the competitive landscape. Understanding the landscape gives us the data necessary to ensure we can be both good and importantly be different from the competition. Both of which are essential if you wish to be a leader in your niche, after all you can’t be a leader if you are following.
Before we differentiate our products and services we must first ensure that a strong market is selected. This is achieved through first assessing 4 criteria.
The first is that there is actually a pain point or problem that needs solving. There are two techniques to discovering whether this pain point exists. The first technique is to get heavily involved in the market, join groups, read industry magazines etc… and experience what it is like in the shoes of the consumer. From here you are able to experience any problems first hand.
The second technique is by developing empathy for consumers in the market, in an attempt to understand what trouble they may have. You must then develop a process of rapid development of products, launching, measuring, learning and adapting as necessary in order to understand through trial and error what the market actually wants or needs.
After discovering a market with a problem you must next assess if they have the purchasing power to pay the price for your product and services. Targeting the unemployed with a product on how to get work fast for example may meet the first criteria and help solve a problem, but you may find it hard selling it to people who don’t have a source of income.
The third criteria is selecting a market that is easily targetable. Thanks to the huge number of online groups, blogs, social media channels, industry magazines, associations and other areas where groups can come together, finding your market and targeting them has never been easier. However, if you are an early player in a niche market you may find it extremely difficult to find a method for targeting your ideal customers.
The fourth and final criteria of assessing a market and checking whether it is a part of a trend and is therefore a growing market. A market that is shrinking, like Newspapers, simply don’t have the funds or capacity to look at new products or services when they are struggling to turn a profit. Leveraging trends will help compound a company’s growth and increase the opportunities available to you.
Once we have found a strong market for your business you can develop a positioning strategy with confidence that a product or service that is truly differentiated will allow your business to stand out and attract a segment of customers that get real value from what you offer.
As Seth Godin says “How can you market yourself as ‘more bland than the leading brand’? The real growth comes with products that annoy, offend, don’t appeal, are too expensive, too cheap, too heavy, too complicated, too simple – too something. (Of course, they’re too too for some people, but just perfect for others.)”
After we have found a strong market and positioned our brand successfully on the edges we will find that we are serving a segment of the market better than bland business ever could. The courageous steps we took to differentiate our brand allows us to avoid being commoditised and attract customers that are value-driven. Value-driven customers are more willing to pay for something that is unique at solving their problems.
Businesses that are unable to charge more for what they do are those that have failed to accurately assess the competitive landscape and use that information to find ways of being both good at what they do and different from everyone else. They have a poor market with even poorer positioning.