4 Reasons Why Reducing Your Price Is The Worst Marketing Mistake You Can Make

When most businesses start out, one of their first ideas is to offer lower prices to attract customers.

However, this creates 4 problems that make it impossible to keep running your business.

In the next few minutes, we’ll go through this list and give you a solution for what to do instead.

Let’s begin!

1 - Decreases Emotional Investment

I want you to remember the last time that you bought a car.

Remember the excitement you had to drive it for the first time!

Now, remember the last time that you bought some toilet paper.

Definitely not as exciting, right?

And that’s exactly what happens when you sell at a low price.

When people pay more for products or services, they are more excited. In other words, they are more emotionally invested into that purchase.

So if you charge a cheaper price, your customers will think that your product or service is not as important.

This means that even if you work the hardest you’ve ever worked, they won’t recognise it, and probably won’t even remember to leave a good review.

So firstly, lowering your price attracts customers who don’t believe that buying from you is important.

2 - Decreases Perceived Value

An experiment that researchers did with wine represents this point perfectly.

In this experiment, they gave testers 3 wines - a ‘cheap’ option, a ‘middle’ option, and an ‘expensive’ option.

They tasted all 3 of these wines and then were asked for their opinions.

All of the testers said that there was a massive difference between the ‘cheap’ and the ‘expensive’ wine.

The catch? They were all the same exact wine.

This proves that customers will judge you based on your price.

If you charge a lower price, they automatically assume you offer a lower-quality product or service.

Even if you offer good work, they won’t believe it until they see your price reflect it.

3 - Attracts Clients Who Are Impossible To Satisfy

The customers you attract at a cheap price will automatically expect more value than they paid for.

Even if you don’t meet one small thing that they want, they will leave negative feedback despite 99% of things being done perfectly.

This links back to point 1 about emotional investment - they value your business less, but they still expect more out of you.

And if you do what they ask of you, you’ll be left wishing that you charged a higher price for the extra tasks they put you through.

4 - Destroys Your Profit Margins

If you want to make £5000, it’s easier to do that by selling a £500 product 10 times than selling a £50 product 100 times.

So the lower price you charge, the more you need to sell to survive.

Not only that, but you have less money to spend on actually improving your product or service to make the quality higher!

So, how do you find a fine line between charging a fair price and not undercharging? Here’s how:

What To Do Instead

Your price should reflect your quality.

If you believe you have a high-quality business, then charge a higher price!

You won’t lose customers. You will attract clients who are looking for a high-quality product or service and who don’t worry about the price if they can get a quality job in return.

Luckily, it’s easier than ever to attract these clients using modern advertising methods.

For example, Meta Ads (Facebook, Instagram & WhatsApp) allow you to use forms that potential customers fill out.

With these forms, you can add as many questions as you want to make sure that they’re serious about buying.

Another example is Google Ads, where you can pick certain keywords like ‘Bedfordshire Plumber’ so that when someone searches that, you come up first on Google.

Plus, you only pay for when every time someone clicks on your link. And if someone clicks on your link and is actively searching for a service, there’s a pretty good chance they'll buy!

If you want help implementing methods like these to attract high-quality clients for your business, click here for a free marketing analysis so we can start that process with you.