1. Major competitors can undercut your prices
2. The lower your prices, the less you earn
3. The less you earn, the less time and money you have to invest in improving your business
Search the Web for “sewing,” and you’ll find links to dozens of sites where you can purchase sewing supplies and equipment. When someone needs sewing supplies, they go to the store that offers the best prices, unless…
And that’s the catch… unless another site offers something customers want more. Poke around on some of the sewing sites, and you’ll find mom-and-pop operations that are out-competing the big craft stores. How do they do it? They offer their customers something more, something unique.
They establish a personal bond with their customers by sharing their enthusiasm for a common interest. They offer instructions, tips, free patterns, and project ideas. They may even offer discussion forums or galleries where customers can show off their creations or a toll-free number to call for advice.
Marketing gurus refer to this as your unique selling proposition, or USP. Your unique selling proposition is how you separate yourself from your competition. In essence, it’s the reason your customers to buy from you instead.
So what’s your unique selling proposition? If you haven’t yet considered it, then what would you like it to be? And please don’t answer with something like “To have the absolute lowest price.” That’s one of the worst USP’s you could possibly have.
Having the absolute lowest price simply means that you earn the absolute lowest profit. Lowering prices doesn’t make you more competitive. It simply slashes your profits and your resources:
– your ability to provide quality customer service
– capital for developing and implementing innovative tools for your site
– time and money for conducting usability tests and market research
To discover your hidden uniqueness, do a little soul searching and market analysis, and use your noodle to answer the following three questions:
– what about you or your business is unique, or how you want to make it unique?
– what can you offer your customers that they’ll find more valuable than just a low price?
– what is your competition missing in terms of serving their customers?
Once you’ve answered these three questions, your USP will emerge from the fog like a ship sailing to the land of success. Hop aboard.