OVERVIEW:
Jason A. Duprat, Entrepreneur, Healthcare Practitioner and Host of the Healthcare Entrepreneur Academy podcast talks about the downsides of selling low-priced products and services and emphasizes the importance of knowing your numbers.
EPISODE HIGHLIGHTS:
- Many entrepreneurs believe offering the lowest price is the most advantageous strategy when entering into a new market.
- While it can be beneficial in some cases, Jason doesn’t recommend considering this as your final business model.
- If you’re launching a new product or service, offer a better pricing option versus undercutting competitors by offering the cheapest price.
- Ideally, your products and services should be sold based on the value delivered. Express the value and quantify it by using customer reviews and testimonials.
- Aim to become the best on the block vs the cheapest on the block.
- Undercutting the competition is a good strategy for big box stores like Walmart. Sam Walt went 10 years without a profit but he was well capitalized. For small businesses, it’s a losing business model.
- Remember it costs time and money to acquire customers. Consider the cost for email campaigns, ads and staff to manage the acquisition process.
- Do the math on the backend and know your conversion rate by using tracking software.
- Jason shares examples demonstrating how quickly you can lose money when you sell low-priced products and services and you’re running paid advertisements.
- Understand your numbers, especially in terms of marketing expenses and your costs for acquiring a customer.
3 KEY POINTS:
- Many entrepreneurs believe offering the cheapest price is a good strategy when entering a new market. However, it’s not sustainable and therefore, a bad business strategy, especially for small businesses.
- Rather than focusing on becoming the cheapest on the block, work on becoming the best on the block so you can charge more for the amazing value you deliver.
- Acquiring customers costs money so know your numbers and be aware of your conversion rate.
TWEETABLE QUOTES:
“You have to watch your numbers and you have to know these calculations.” - Jason Duprat
“If you want to charge more, then you have to deliver more value.” - Jason Duprat
RESOURCES MENTIONED:
Sam Walton - https://www.entrepreneur.com/article/197560
Walmart - https://www.walmart.com
Healthcare Entrepreneur Academy for Digital Businesses - https://www.facebook.com/groups/HeathcareEntrepreneurAcademy/
Healthcare Entrepreneur Academy for Brick & Mortar Businesses -https://www.facebook.com/groups/HealthcareEntrepreneurAcademyBrickandMortar/
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