The Australian Small Business Blog

Thursday, March 03, 2016

Marketing Moments - Getting a Premium

The marketplace has never been more competitive, and it's never been easier to compare. In fact some businesses, such as iSelect, are built of offering side-by-side comparisons. In such a marketplace, price shopping is the norm.

To win business without discounting, and to achieve a premium, it's essential to be able to demonstrate the value you provide. This can be based on something the customer wants and can't do for themselves, or something they don't want to do themselves.

It's important to understand the value chain in your sector. For example, some businesses are little more than intermediaries. They take the order, then contact someone else to fulfil it. The value they add is their contact list. They then find their margins being squeezed because their supplier wants more of the profit. The risk is, the customer discovers who the supplier is, and cuts out the middle man.

The value you add could be that you:

- Save them time
- Save them money or make them money
- Help them achieve a personal goal
- Make them look better to others

To get the premium, though, you need to be able to demonstrate that you can produce superior outcomes to your competitors with greater certainty. This superiority may either be real or perceived.

This size of the premium you achieve is dependent on how well your superiority, real or perceived, can be communicated to your customers.

To demonstrate the truth of this, consider the elephant in your sector, the big brand. Are their products and services really that much superior to yours that they deserve the premium they charge, or are they just better at providing reassurance that they can deliver.

Your ability to charge a premium is ultimately dependent on being better at providing confidence that you can deliver than your competitors, that you are the safe choice

What are you doing to convince your customers that you are the safe choice?

All you need to do now is to Empower yourself and take action ...

May You Business Be - As You Plan It!

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Dr Greg Chapman is the Director of Empower Business Solutions and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.

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Dr. Greg Chapman is also the author of
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