Price does matter, but it isn't all that matters

Price is important. Not many of us blindly buy an item or service without first doing some comparable shopping. It makes sense.

But I think it is more than just the price that matters. Lets look at it from both sides, the consumer and the service provider.

The consumer has an obvious goal of getting the best price he or she can. Parting with hard earned money is difficult. But price alone isn't always the deciding factor for most consumers. They want "value" for their consideration. If consumers only made choices based on price, stores like Holt Renfrew, Whole Foods, Four Season's Hotels to name a few would not exist. Our city would be populated by Dollar Stores, Wallmarts and Budget Hotels. Consumers make choices on items and services based on a combination of price and value. Service, knowledge and the experience matters to most consumers. Consumers take into consideration the over all experience delivered when securing an item or service. It matters to them how they are treated, and how the product or service is backed up. Buying from an experienced and reputable dealer matters. A consumer considers the price, service, knowledge of the service provider and reputation when making their choice.

For the service provider, being competitive is critically important. But it is not just the price a service provider sets that makes the difference.. Assuming consumers make their choices based on many factors, a service provider must balance their product and service and deliver a clear choice to the consumer. Service providers which sell solely on price will always be undersold. In the price game, another service provider is sure to come along which will beat your price. Selling your product or service with price as the dominant factor is a sure receipe for a failed business. It's tricky for a service provider. They certainly want to work with as many clients or customers as they can, and hate getting beat out by price. A service provider who begins competing with others based on what their price is, without looking at the value offered with that price will have a failed business eventually.

So in a competitive market, what is a service provider to do? First - never sell on price. Second - be clear as to what you are selling and what value you present for consumers. Third - make the difference between you and your competitors evident to your consumers. Fourth - don't play the game of others - sell who you are. Fifth - make sure what you are selling has value. Six - repeat over and over again.

Markets have always been competitive and consumers have always had choices. Take a look around next time you are driving. How many models of cars do you see? Each and every one of these vehicles can get you from A to B. When looking at the various models and brands I am sure you not only think of the price of the vehicle, but what it represents in value, service and reputation. Each vehicle tells a different story and to be an effective and a growing service provider you need to as well. 

Price does matter, but it isn't all that matters.

 

Comments

[robert ede]

As always "you get what you pay for", "free advice is priced accordingly", "You can always find someone willing to supply lower quality at a lower price"

[Duncan]

For some agents (not highly skilled Hallmark agents of course), price is their only competitive advantage.