<p>I read way too many books on marketing, business, networking, and pretty much anything else I think will help make my small business succeed. To that end, I also listen to too many podcasts, read the business section every day, and bore the snot out of most of my friends as I pick their brains for better business ideas.</p> <p>In all of this reading, listening, and discussion, one theme pops up over and over again: Don't differentiate on price. "Rather," the gurus say, "figure out what advantages you have over your competition and sell on that." It's great advice but unfortunately, as I recently discovered, it too often leads to a belief that price doesn't matter that much. Instead, we think that our great products and service is all that matters. That means people will pay whatever we want.</p> <p>That's not true. Yes, you do have to provide a great product or service but <em>you can never lose site of the fact that price does matter</em>. Remember, at least a few of your competitors are also providing good products and service. If you're out of line with their pricing, you'll lose your business to them.</p> <p>This point was driven home to me recently in my own business. I run a small company that repairs high-end cell phones. In particular, we have a lot of success fixing broken iPhone screens in both our Chicago and Seattle offices. We were setting new sales records every month from May through August, and our business had grown almost 300% from January's sales. We were feeling pretty cocky considering the state of the economy.</p> <p>Then September arrived. Suddenly, the phone was ringing less and our sales were dropping. Our Google Analytics showed our website traffic was just as strong as ever. People were still arriving at our site, they just weren't buying.</p> <p>It also had nothing to do with our service. People were still ecstatic after we fixed their phones and we had dozens of glowing reviews written about us. But the reality was, our sales were slipping!</p> <p>So I did some digging. We were charging $95 for our repair service and many of our local competitors were charging around $80. They also had good reviews and, most likely, were doing at least close to as good a job as us. Then there were a slew of other companies offering mail-in repair services for under $70. Granted, those "cheap" companies seemed fairly sketchy and unprofessional, but it was still an option for people.</p> <p>With about 10 days left in September, we made a decision and dropped our prices from $95 to $85. That's over a 10% drop in our pricing.</p> <p>The results were staggering.</p> <p>Even though we weren't the cheapest provider, we were now competitively priced, and our sales immediately skyrocketed. The last week of September was the biggest one week of sales we had had to that point, and October is going to be over 25% higher in sales than any previous month!</p> <p>Don't ever forget this: You have good competition out there and if you aren't at least comparable in price, you will not survive. Price matters.</p> 2009-10-30T01:39:59Z 2009-11-02T16:09:45Z -0.658646 163 7194 true 15 2639 price-does-matter 6 2009-11-02T09:09:09Z 2009-11-02T16:09:45Z

Great products and service are essential to your business, but price still matters. You might not want to admit it, but some of your competitors are providing good products and services, too. If you're price isn't comparable, you'll lose business.

1 2009-11-02T16:09:45Z