You’re likely to encounter fierce competition as an entrepreneur or business owner. One way of trying to stand out from the crowd is by lowering your prices. But before you do that, hear me out: I think it’s a bad idea—and here’s why.
It might make sense at first glance; a lower price tag could help you attract more customers and close more deals. But it isn’t as simple as that. In fact, research suggests that lowering your prices could have some serious downsides.
For starters, customers may come to associate your product/service with “low-cost offerings in general,” which could damage your brand image and ultimately make it harder to raise prices down the line. And then there’s the matter of profitability; offering discounted services can eat away at profits in a big way—so much so that the extra revenue gained through increased sales may not actually be enough to cover losses incurred by lower prices.
Another argument against lowering your price? It could signal desperation—a sign to customers and competitors alike that you can’t compete on quality or value alone. In other words: think twice before slashing prices just to try and get ahead of the competition.
What could you do?
Fortunately, there are plenty of alternatives if you don’t want to reduce your prices but still want to stand out from the crowd. Consider bundling products or offering discounts on larger orders; these strategies will help bring in customers without sacrificing profits or damaging your brand image. You can also focus on building relationships with potential clients through social media posts or email marketing campaigns—or even offer free e-books for potential customers! If done correctly, these strategies can be just as effective at attracting new customers as dropping prices ever could be—but without any of those pesky drawbacks mentioned above.
When it comes down to it, lowering your price should only be used as a last resort when all other marketing tactics have failed; doing so too quickly can backfire in spectacular fashion, so use caution and common sense when making such decisions! With some creativity and experimentation, you can find clever ways to stand out from the competition while keeping costs manageable—and that should always be what entrepreneurs strive for!
