Should your marketing and pricing be different when you’re just starting your business than they are once your business is established?
This is an important question to ask. I was recently helping two high school students who were opening a new business.
They’d had some success, but one of their early questions was: “Where should we look for new customers?”
Their focus, as is true for most start-up owners, is generating revenue. Consequently, they were keeping their prices low to attract more business.
This challenge is not unique to start-up businesses. Jewellery retailers often face the same temptation. The assumption is that lower prices will generate more traffic; however, customers shopping for quality, craftsmanship, and expertise often evaluate much more than price alone.
The problem is that they were offering high-end quality services. Again, it’s typical for start-up owners to provide high-quality service to demonstrate how good they are while offering low prices to generate more sales.
It’s the dichotomy between great service and low prices that confuses the market, which is the real problem.
So, what’s the alternative? Once we identified who their ideal customer is, what’s valuable to that customer, they could see that their low prices would, in their words, diminish their business.
I was amazed and thrilled by how quickly these two students grasped that low prices did not substantiate their claims
of exceptional service.
The next concern was foregoing business at a time when revenue was in short supply. There were several elements
to consider, including which customers they would be losing.
Furthermore, are the customers they’d lose be customers they’d rather not have? How do the answers to the previous two questions impact their marketing?
The answer to the first question, again in their words, the ‘cheapskates’ is who they’d lose.
If they were to keep their prices low, the customers they’d be losing are the value buyers who would have bought if they hadn’t been confused by the dichotomy between low prices and claims of exceptional service.
Humorously, their answer to the second question was: We’d rather not deal with cheapskates.
When we tackled the third question, I explained that there is business that you market to get and business you’ll take when it comes your way. They need to market to the customers they want.
Having said that, if they got a referral to someone who wasn’t their ideal customer, and they felt that it was someone who’d appreciate their service, they should feel free to take them on as a customer for now.
Later, after building a substantial base of their ideal customers, they can tell less-than-ideal customers that they can no longer serve their needs.
For jewellery store owners, this distinction is especially important. A retailer may happily serve a customer who walks in looking for a simple repair or an inexpensive gift, but their marketing should still focus on attracting the customers who value design expertise, trusted advice, custom work, premium brands, or long-term relationships.
Marketing should be intentional rather than opportunistic.
One of the joys of working with these two students was their openness to new approaches to their business.
Another joy was their ability to quickly discern what made sense to them and to embrace concepts that rang true. Kudos to them.
As I’m sure you can imagine, I am intentionally not using their names in this article out of respect for their youth and to protect their privacy.
To answer the original question, whether you’re just starting your business or are well-established, you should market to your ideal customers.
That doesn’t preclude you from occasionally taking on a customer who doesn’t fit your ideal customer profile, as long as you’re confident they will appreciate what you do for them.
Your price should reflect both the quality of your offering and its value to your customer.
Pricing your offerings this way helps you attract the customers you want while avoiding wasting time with those who don’t.
In the jewellery industry, price sends a message. Customers often use price as one indicator of quality, craftsmanship and trustworthiness.
When pricing is inconsistent with the experience you provide, it can create uncertainty and make it harder for prospective customers to understand what sets your business apart from the competition.
The added advantage to these takeaways is business integrity.
Your business is trusted because of the quality of your products and services and your willingness to walk away from prospects who don’t demonstrate an appreciation for the value you provide.
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