Jan 28, 2021

Don't start with price

When considering all of the ways you can offer a better product or service than what currently exists, avoid starting with price as a differentiator.

First, it is difficult to beat incumbents with price. They have been around longer than you have and have already developed relationships with suppliers or manufacturers to afford better rates than you can. They have also already worked out the kinks in their product or service while you probably still have to do some experimentation to figure out what works for you.

Second, price is a way to hide from offering something better. Can you offer something customers would be willing to pay more for? If you’re offering more of the same, but cheaper, then you are selling a commodity. You will be easily replaced by the next person who comes along and offers the same thing cheaper than you.

Unless you have invented a completely new way of doing something that cuts price by an order of magnitude, then competing on price is not the path for you. Be bold enough to charge more for your better product or service.