You will have noticed that the same product costs different depending on the business where you decide to buy it, and this is because, in general, each seller has a pricing strategy based on their margins and cost structure. The first reaction as a consumer will be to pay as little as possible for that product, but if it is only based on that, problems could arise after the purchase (or even before).
The pricing strategy is vital for the normal functioning of a business, and both in the entrepreneurial ecosystem and in large companies it is an art, since it is very difficult to find what the equilibrium price will be. In this note, we are not going to talk about how to approach a pricing strategy, but we are going to tell you what you should NOT do, unless you want to sink your business: opt for a strategy based on low prices.
Where the mistake is made, when not to fall into temptation and why you should not fall back into this business-killing strategy, is what we will learn in the next few minutes.
Where the first mistake is usually made
You have a product that is great, you have finished the prototype, and it is ready to go into mass production and start selling it. This is a very motivating moment, especially if you have already defined that the product has a whole market out there waiting for a new player to appear, and this one has passed your SWOT or SWOT analysis.
TIP! The SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), also known as SWOT analysis, is a tool for studying the situation of a company, institution, project or person, analyzing its internal characteristics (weaknesses and strengths) and its external situation. as threats and opportunities.
And what is the first mistake that is usually made? Before setting a price and starting to sell the product, analyze the competition’s prices and start a race to the bottom of the sea, that is, write down the possible competitors on a spreadsheet and put your product below the average price, even if This means a severe reduction in your margins, just in order to gain a place in the market. Far from being an intelligent strategy, if everything goes as expected, you will position your product as economical and your brand will be seen as “cheap”, and when the market sees a product as cheap, it will want to pay less and less for it.
Why you shouldn’t be tempted to enter the low price race
In addition to your brand image, there are other things that will weigh on this decision and that you should weigh. A low price strategy is moderately sustainable in volume sales businesses, where profits are in the quantity sold, and nothing that surrounds the product matters: only the product itself matters. And we say “moderately”, because sooner or later other business assets end up being destroyed, such as the warmth in pre- and post-sale service, the humor of your collaborators for running all day after clients who want to pay less and less, the packing of your product and the purchasing experience in general. Selling more and cheaper is not always better.
The important thing is that you come back for more. And believe us, if your purchasing experience is not good, or it does not matter if you buy your product over another just because its attractiveness is the price, sooner or later, it will end up sinking you instead of helping you grow and develop your business.
Bury the investment and renewal of your business
The businesses most likely to persist over time are those that have the capacity to innovate, and a strategy based on low prices will distance your brand from this objective, since to keep the prices of your products at a minimum, you will increasingly look for suppliers. economic companies that share this same criterion, you will have to compromise your culture in this direction, and you will have to give up a profit margin even below what is necessary to operate your business.
By the time your business has to make a leap in innovation, you will already be out of the race because you do not have the resources to move forward, and when you decide to change your strategy, you will run the risk of losing your position in the market because you are labeled “cheap.” ”, and end up leaving the business.
“Good, Nice and Cheap” does not exist
You will have heard the concept of “Good, Nice and Cheap”, the three “Bs”. Well this is just a utopia. You could get a product through a temporary offer at an incredible price, but this is not sustainable over time. In reality, up to two of the three criteria could be met if you are looking for something sustainable and durable over time, but look closely if all three coincide.
If any (or all) of the characteristics do not apply to your product, replace them with their qualities. The result will always be the same as long as you want it to be sustained over time.
TIP! When you find a business that claims to be proud that its prices are the lowest, and that it is the best it has to offer, you better get out of there or you could get a nasty surprise sooner rather than later.
There are always customers looking for the cheap option
Of course, you won’t be able to please everyone, and there are customers looking to pay similar products to the highest bidder. If a low price is the only way to convince your customers, then it is likely that they will stop choosing you if you decide to change your strategy or at the first change in the price of your product. The only danger here is when they are in the majority, or the majority would choose your product based on price.
What those customers who aim to obtain the three “Bs” that we just saw may notice is that this product will tend to decline in quality over time, something that they may not care about. But yes to you. Simply lowering prices as much as possible only affects the overall perception of your brand.
It is not healthy to stand out for being “cheap”
The race is lost if the only difference with your competitors is the price, since someone cheaper than you will always appear, and this will force you to continue lowering your price. As we already mentioned, this causes the perception of your brand to be severely affected. If you entered this vicious cycle, you can try to get out of it by finding a new customer base that values other things about your business. Focus on something like quality. The “cheap” axis will shift to focus on other things.
Why would they choose you if it weren’t for price? Well, there are several: from how you treated your customers or whoever came to ask about your product, to nice packaging, or that shipping is included for their city. Use your imagination.
Be careful not to overprice
Be especially careful not to tip the balance towards the other extreme: too high prices. A high pricing strategy could make buyers perceive that you are trying to get too much out of them. The recommendation is that you maintain a responsible pricing scheme for your brand and your business, which allows you to work, develop, innovate and invest in continuing to grow. Just as many buyers prioritize the price of a product, there are plenty of others out there who value other things about your brand.
Is WNPower expensive or cheap?
At WNPower we operate with the right price. As a premise above all in our pricing policy, you will find that we will not trick you with an ultra-low entry price, and then hit you with your renewal like the rest of the web hosting providers do, because we believe in long-term relationships. Our prices are clear, they are published as they are. Then you can apply a promotion if you want.
Regarding the composition of our prices, we want you to know that they have a careful balance between all the services, supplies and human capital that make them up, and that they do not go out of range with other services or products that you acquire on a daily basis. For example, we usually compare our smallest Hosting plan to the cost of a pizza, and this one, while it won’t satisfy your hunger, will keep your website running all month, with premium tools, supported by the best server platform in the world. as is AWS, and with support always at your disposal. At the same time, we compare hosting plans aimed at more robust websites, which we call Cloud Hosting, with the price of a quality Internet connection.
You see it? We find a way to provide you with a high-level service, with very high added value, for a more than affordable price compared to your other daily expenses.
As for the features that make it unique, below we leave you a summary of the most notable ones, but you can visit our commercial site if you want to find out everything we have to offer you and better understand why it is the best option to host your if you.
We host on Amazon AWS
Our hosting platform is supported by the Amazon AWS cloud, the infrastructure provider that leads the world in cloud computing. Thanks to our alliance with Amazon AWS, your website will fly at speed and will be available all the time.
In the not-too-distant past, we stored our users’ web pages on physical servers like the rest of the web hosting companies do, but we decided to move to the cloud due to the problems that this physical technology that is now obsolete often entails. A server breaks: your website is down until it is intervened and repaired.
We store our backups in Amazon S3
We are concerned about backup copies of your website, and that is why when we make them, we store them in S3, which is the Amazon Web Services storage service. Due to its versatility and replication in various geographic locations, Amazon S3 is the most secure information storage on the planet, and that is where we store the backups of your website.
Free cPanel control panel and SSL certificate.
Another of our great allies is cPanel: the easiest-to-use hosting control panel. Today, cPanel is a standard for website hosting and any hosting company that offers web hosting services professionally is using it. If you are looking for hosting for your website and the provider you are looking at closely does not have cPanel, then allow yourself to hesitate. We tell you more in this other note about why select a web hosting provider with cPanel.
In all our hosting packages you also find a professional SSL certificate that protects all domains and subdomains hosted on your plan at no additional cost.
Exclusive tools
In addition to the most popular professional tools pre-installed on your hosting, you will find our exclusive tools. An entire suite of hosting tools that solve the most common day-to-day problems almost always in one or two clicks, built based on recommendations and needs from more than 20 communities of webmasters and developers from around the world.
We are constantly creating our own and applying improvements to existing ones to increasingly highlight our platform. You can also manage all aspects of your hosting with our mobile app, available for Android and Apple devices.
Shielded websites and detailed reports
The security of your website also worries us a lot. That is why in addition to everything you do to protect your website, your hosting will be permanently shielded by advanced security rules, so that it is out of reach of the most common threats, be they web viruses or any other type.
Additionally, if something goes wrong with your site or is out of the ordinary, we send you detailed reports to apply improvements immediately, supported by our team of support technicians in case you have any questions.
Automatic migrator
If you’re moving from another hosting provider, we have a tool you’re going to love. It’s called PowerTransfer and it moves your website in a few clicks based on the settings of the most popular web hosting providers.
Fanatic level support
Our staff of technicians are always available to guide you or solve a problem. They will always be there to lend a hand, because we love challenges and publishing web pages that lead to success.
Conclusion
Getting back to pricing: a race for the best price could cause your business to go under sooner rather than later. Unless you want your business to last a few months, the low-price policy is nothing more than a spiral into the abyss. And you don’t want that for your brand, right? When entrepreneurs create something, we are always excited about the longevity of our brand and product, and believe us that these tips that we mention today will help you achieve your goal.
