New Businesses Should Stay Away From Selling to Budget Customers
This post may shock you but a fact is a fact. Save yourself from the budget customers
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Does selling cheap/ economical lead to more profits?
Put yourself in the shoes of the customer.
How important is the price of the product for you, when you’re trying to buy something in the market?
If your answer was “a lot” or “a high price can be a dealbreaker” think again.
Would you compromise on the price of products like food? Skincare? Personal Care? Medicines?
I hope your answer was a vehement no for those product categories.
If your answer was, “I’d still look for the price tag in every sale”, you really need to start working on your money mindset and I suggest you follow Paycheck To Profit (disclaimer: that’s my business) on YouTube &/or Instagram and start working on your money mindset.
So, if as a consumer, you understand that buying the economical version of any product might not be a good idea, why do you wish to sell your products at an economical price tag?
One common argument that I get is, “selling cheap gets the volume advantage and higher volumes mean higher profits.”
Let’s break that myth for you, today.
Selling premium vs. selling at economical prices
A customer doesn’t buy a product/ price tag.
A customer always buys an offer, a story and a value proposition.
Yes, economical price tags might get you a higher volume, but higher volumes also come with challenges of higher distribution costs, higher customer service cost, etc.
Also, from my personal experience, I can tell you one thing. Customers who buy at an economical price, tend to demand for a lot more value to get maximum juice for their bucks.
It’s not like customers who pay a higher price don’t care about the value exchange.
More often than not, customers who pay a premium, expect premium service at the time of the sale and product delivery.
Once the promised product is delivered, the premium customer tends to come back only in case of a breakdown.
Unless your product is going to be sold to millions of customers (on a weekly/ monthly/ annual basis), do not bother selling cheap.
Let the corporates with deep pockets, large teams, and tons of resources find ways, techniques to market to a large crowd, build the logistics and distribution channels and reach the interiors of the market.
You (and your business) are better off trying to solve problems in the lives of the customers who are ready to buy at a premium.
Conclusion
I hope you resonate with the idea shared in this note.
I know accepting this idea may be difficult for a few readers.
If you’re one of those, feel free to reply back/ reach out to me on DM/ drop your questions/ thoughts in the comments.
I’d be happy to continue this conversation and answer all your questions to the best of my knowledge, ability and share my experiences.
If you’re an aspiring business owner and are confused about how to create an offer for your business or how to sell your products at a premium in the market, you can consult with me for the same, feel free to reach out to me and let’s connect.Your Thoughts!
If you’ve reached till this point of the post, I’m sure you must have some thoughts/ feelings/ opinions about what you’ve just read.
I’m done sharing what’s on my mind, and now is your turn to share your POV.
Tell me how you are processing the information that you’ve just read?
Do you agree with my thoughts?
Do you think I missed something important?
Do you disagree with something in particular?
Let’s continue this conversation (or ask your questions about the post) in the comments below.
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Prompt used to create the image for the note
P.S.: Image made on Meta AI using the prompt, “Imagine two competing business wherein the first business owner is sad because they're overworked and the other business owner is relaxed and happy”