I’m sure we probably all agree that competition is a good thing. But sometimes it can be really frustrating. You may have a really great product, but you see another booth that has something similar and is selling it for dirt cheap.

You know the quality isn’t near what yours is. You know the items won’t last. Yet, you find yourself struggling to compete with them. There’s no way you could sell your items for that price. You’d take a serious loss. What do you do? Just figure you have to tough it out and figure that it’s a loss?

To that I would say "No Way!". Sometimes it can be hard to see past the frustration. However, the challenge of competing with cheaper products has been around ever since there has been commerce. There are a lot of companies being very successful at beating the cheaper product. I’d like to start a discussion here as to how you can successfully beat the cheap booth. One of my readers referred to it as the KMart booth. That’s how this post got it’s name.

To start let me encourage you to post your thoughts. Take a minute and add a comment or frustration to the list. It really helps others to know they’re not the only ones struggling with a given issue. If you have some ideas and some success stories please feel free to share those too.

So what can you do to sell your products when you’re competing against cheaper products? The first key I’d like to highlight is that you shouldn’t be competing on price. At first that might not make sense to you. You might be used to thinking that the only thing that matters to a customer is price. But, that just isn’t the case.

Consider these three items from the article Value-pricing strategy: "We’re not the cheapest but…".

• Customers are value conscious rather than price conscious e.g. some customers will pay extra for prompt delivery.
• Customers assign a personal value to a product or service e.g. a teenager is willing to pay a premium price for a concert performed by his idol.
• The selling price is based on customers’ perceived value rather than on the vendor’s costs e.g. an ebook costs less to produce than a paperback but readers will pay more for it because of the value placed on format and instant delivery.

The idea is that you should be competing not on the price of your product, but on the value of your product. People aren’t just buying the other product because they see it as cheaper. They buy it because they think they are getting the value they want.

They might even know that the product in that other booth isn’t as good as yours. They have it in their mind that for what they are paying the cheaper product is good enough. It is better than paying the higher price even for a better product.

So what you are competing against isn’t price. It’s value. You’re competing against the mindset that they are getting something good enough for what they paid. This is often times called perceived value. What you need to do is change that perception. You need to change what they perceive the value of your product to be. You need them to compare what they get from purchasing your product with what they get from purchasing a cheaper product and see yours as giving them more of what they want.

So just how do you do that? How do you change that perception? This is exactly what we are going to talk about. So stay tuned, and jump in with your comments at any time.

Search Terms:

Value Based Selling
Value Added Sales