What kind of a business do you want to have?
I really want you to think about this. Is the business that you have the same one that you picture in your mind when you think of your business in its ideal state? Don’t make any excuses. It’s time to get real with yourself. I promise you that once you answer this question honestly, you’re already putting yourself back on the right track.
I don’t believe that building a business is difficult. But where it does become difficult is when an entrepreneur builds a business by practicing instead of by truly understanding who their customers are and where they can add the most value.
What I often find with business owners is that they undercut their own value by offering their customers deep discounts that ultimately become the business’s greatest vulnerability.
When a business is new, it will often make illogical deals with customers just to build up a book of business, but this is the wrong approach for multiple reasons. Let me tell you why.
Don’t undercut your long-term brand strategy
Products and services cost money. Every aspect of those products and services comes at a cost. Much of this is financial, but an often hidden cost is in brand equity.
When you bring on a business and offer them a service at a deep discount, you begin to create the belief that these discounts are the only way to bring in more customers. This belief will permeate across your team, your customers, and in you.
As your volume increases, you’ll find that you’re spending more money to create less revenue than if you stuck by your original pricing structure to begin with. Your team is overworked, you’re worried about COGs, and your customers are likely only sticking with you because of the deal that they’re getting. The moment that someone else can offer them a better price, they’re almost certain to be out the door.
You haven’t created any stickiness, because you haven’t built your brand on value. You’ve built your brand on being the lowest price. So, what should you do? Well, it’s simple in concept but difficult in practice, but if you’re the sort of business that can master this technique, you’ll be 10X in no time!
Understanding your customers is the key to creating value
If you’re dealing with any good negotiator, they’re undoubtedly looking for ways in which this deal is going to benefit them the most. The most obvious thing they’re going to do is ask for a discount. This is a huge opportunity for your business.
Sure, you could offer a discount, but what you’re ultimately telling your customer (and yourself!) is that your work isn’t worth your asking price. So instead of incentivizing your customers through discounts, it’s up to you and your team to really get to know your customers — their needs, their operations, and their opportunities — so that you can show them real value through your products and services.
This is a different sort of conversation. You’re showing a different level of understanding and customer service than your competitors can. You’re standing firm in believing you should be paid what you’re worth. And your ability to deliver long-term value to a high-end customer will not only build brand loyalty with that business, but it will also lead to brand advocacy.
Now, they’re introducing you to their network, not because you have the lowest price in the market, but because you’re creating the biggest impact on their business. This will only create immense growth for your organization!
A huge part of understanding your customers is understanding yourself. If you want to be a deep discount, high-volume organization, then you’ll have customers that reflect that: High churn rate, zero brand loyalty, and clients that are only looking for more ways to take advantage of the relationship.
If you’re a business that wants long-term relationships designed to create long-term growth, then understanding how you can support their goals through your products and services, then a value-based strategy is the only way to go.
To learn more techniques related to creating a value-based approach to sales and customer support, then you need to attend a Cardone Ventures event. Just imagine: The entire Cardone team, driven business owners just like you, and me, Brandon Dawson, ready to provide you with the clarity and guidance you deserve. Seats go quick — Register now!