No matter what industry I hear business owners say that the competitive market place is driving down prices. I am not about to say the market is irrelevant or market pressure does not exist. Off course it exists.
But if you allow this assumption to drive our business you will lose sight of the real game.
Great companies will always be able to achieve a premium price. But they don’t do it by just trying to be the most efficient or achieving economies of scale.
Great businesses focus on the value they sell, not the product or service. Great businesses do things different from other businesses. They begin by understanding what is of value to their prospective customers. From there they explain and demonstrate the value of what they are selling.
The key is to have the focus on value. Understand what is going on in the lives of customers. Importantly communicate the value of what you sell. Equally important do or be something different from the other businesses in your industry.
Businesses are good at explaining the technical aspects of their product or service but only a small part of the overall value lies there. Value has many different components from the experience to the end outcome the customer is striving to achieve.
Particularly those of you in the knowledge industries (freelancers, experts, consultants, professional service firms) need to focus on the outcomes. (The product businesses reading you are not left off the hook).
The marketplace is definitely competitive (we would not want it any other way). But we are in charge of our prices. Not the market. So answer the question – what value will we need to provide that will allow us to charge higher prices?
If you focus on value you will be allowed to raise your prices.