Most business can fall into two categories—those that provide and promote “bargains” and those who offer products and services that are marketed as “premium.” Both approaches work and it is really just a matter of deciding what sort of business you are, what you are selling or marketing, and what works with your target market.
As a general rule, if you go the bargain route, you will need more customers than if you promote the “premium” route. This means that if you are providing a product or service that you are promoting and pricing as affordable, a bargain, or a good deal, and the pricing is actually on the lower end of the scale for your industry, you’ll need more customers to make a profit. If you have the capacity to attract and service those customers and your product value really is at the lower end of the industry scale, this can be a very lucrative way to go.
If you are providing a product or service that you are pricing and promoting as “premium”—you should be making sure that what you are providing is worth the price you are charging. This can mean higher end good or services, better customer service, “extras” like consulting, warranties, and delivery, and other add-ons that make your product or service special. If you are charging more for a premium product or service, you can have fewer customers whom you nurture and cultivate and “pamper.”
As an example, look at car sales—if you visit a dealership that sells used, low-end, or moderate-priced cars, the lots will be huge and you will likely see lots of advertising to attract the most customers looking for a good price and reasonable quality as possible. However, if you visit a BMW or Mercedes dealership, the dealership will usually be much smaller, with smartly-dressed sales people and an operation that caters to a smaller market. Customers at the higher end dealership will be courted and treated quite differently in most cases than those at the used car lot.
You get to decide what you want your business to be and pricing and service delivery will be determined as much by your own comfort-level and vision for your business, as by the demographic and target market you are selling your products or services to.
See Also: Promoting Something for Free
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