Day 12 - Resist the temptation to under price and discount

Young companies tend to make a consistent and dangerous mistake in starting their companies. They price their goods and services under market value or feel they must "run a sale" to get business in the door.

When we get started we tend to have some confidence issues. That is completely normal. So if that's you, don't beat yourself up. It's life. If we are unsure of ourselves, we often try to win business on price.

There's an old salesman adage that says "win on price, die on price." In other words, the business you get because you are the cheapest will only be there as long as no one else is less expensive. Being the lowest cost provider is a risky position to try to own - especially if you are a small to medium sized company.

So what can you do as an alternative?

Focus on creating more value for your customers, but keeping your prices in tact. We often suggest that a "free with purchase" offer is more motivating to customers that the typical "15% off" special.

If you are like most, you will be tempted to decrease your prices in hopes of achieving business. If you find yourself relying on this approach, try to catch yourself - at least some of the time - and see if there are not alternate strategies. You will find there are, that customers will pay more if they perceive greater value, and that resisting the temptation to discount will add to the profitability and long-term health of your company.

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