The Problem with Going After Price Shoppers



No matter what line of work you’re in (web design, residential contracting, auto repair, etc), you’re always going to run into customers who try to talk you down on your price. While there’s nothing wrong with some healthy negotiating, it’s a huge red flag whenever a customer’s only concern is the price.

Not a week goes by that I don’t get phone calls or emails from people who want to know “how cheap” I can design a website for them or design a logo for their company. They don’t ask about the quality of my work or my design process; they just want to know if I’ll do it cheaper than the other guy.

In the past, I took on a few of these projects. I convinced myself that I could still make it profitable, even at the lower price. I even tried to establish terms up front with the customer outlining what I would do for them at the discounted price.

Every time I’ve ever gone into business with a price shopper I’ve regretted it.

Why?

First of all, price shoppers are always more trouble than they’re worth. Cheap customers always expect more, no matter what the terms are up front. In short, they want more work for less money. And they’re often very demanding about it. It’s a huge headache.

Another issue is that I don’t want Raxa Design to be known as the company to go to for cheap work. If you start to take on price shoppers, it can be easy to paint yourself into a corner to where you’re only getting low quality clients. I don’t know what it is, but one price shopper tends to lead to another. It’s hard to dig yourself up out of that hole once you’re in it.

Then there’s the fact that price shoppers are the most disloyal customers out there. If someone agrees to do business with you based only on the fact that you have the lowest price, they’re going to ditch you as soon as someone cheaper comes along. I’d much rather go into business with someone I can build a long-term relationship with based on a number of unique things I can offer to them.

No matter what business you’re in, I highly recommend looking for any USP other than price. Price wars are a fight to the bottom, and the quality of customer you attract is as bad as it gets.

Remember, this isn’t Auction Hunters or Storage Wars. The best price doesn’t win. You shouldn’t treat your business identity so carelessly; otherwise, customers won’t take you seriously.

What do you think? Leave a comment to let us know!

3 comments (Add your own)

1. Mak wrote:
GREAT post; would do so many business owners some good to read. Bottom line - if you don't place value on your products/services, neither will anyone else!

Tue, May 10, 2011 @ 3:58 PM

2. Brian wrote:
Mark,

you got that right. Thanks for the comments.

Tue, May 10, 2011 @ 4:21 PM

3. Colby wrote:
So true. It's a dangerous cycle to get involved with.
If you get a lot of referral business, you definitely don't want to get in a cycle of making concessions over and over!

Tue, May 10, 2011 @ 6:17 PM

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