Wondering If You're Too Expensive? It's Probably Not the Price.

How many times have you had the thought, are we too expensive?

If you're wondering whether bringing your prices down is a lever you should pull to attract more business, chances are you have a more significant problem than price alone.

Chances are your business isn't differentiated enough. You don't appeal so strongly to a specific type of person that they're willing to pay a premium above a commodity price to get what you offer.

The replaceability test

Here's the test. If your customer can replace you by driving a few minutes further down the road for the same thing, make no mistake, you are selling a commodity. You're always going to scamper around looking for new customers, special offers, or slashing your prices.

Conversely, if you're the only option and you greatly appeal to a specific person, you have more control through the entire buying process. The absence of choice and the lack of replaceability lift you above commodity, make you a valuable proposition, and give you leverage in the transaction.

Marketers call it a competitive advantage or a unique selling point. There's a business on the Bellarine Peninsula, Sea All Dolphin Swims, where you can swim with dolphins and seals. There are limited permits to run those tours in the bay, and simply having one creates a unique selling point. Not many tourism businesses operate with that kind of exclusivity. Most have a like company only a few minutes away.

You may not have access to something as exclusive as a licence to swim with dolphins. You don't need to. Your service and your positioning can be your competitive advantage, if you make it one.

Even today, outstanding service remains a differentiator. So does designing a brand that appeals to a specific type of person.

The safety trap

It feels safe marketing to the masses. The audience seems big enough to warrant the effort. But when you try to appeal to everyone, you appeal to no one. You generalise, and when you generalise, marketing gets hard. You can't communicate effectively to the masses and, at the same time, in a manner that highly appeals to a specific type of person.

While you've been wondering whether to drop your rate, the best tourism businesses have been focused on building a remarkable product or experience for a tiny audience. Guess who is winning.

Your ideal customer cares about what you care about. Their values align with yours. They're profitable if you get it right. They want what you do, and enough of them exist that if you get it right, they can sustain your business.

Race to reposition

Pick a small audience and design a remarkable experience that helps them achieve their desires and aspirations. Use the language they would use to attract them. That's the game.

A brand strategy is only helpful if, long term, it helps raise your product, service or experience above commodity pricing. It gives you the ability to charge a premium by delivering significant value to your ideal customer and instilling a genuine desire to be loyal to you.

So the next time the thought arrives, don't race to the bottom.

Race to reposition firmly to a smaller group of prospective customers.