Allen & Company PC

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A Business is What it Charges

A Business is What it Charges

Pricing does not create value per se, but it can greatly influence the perception of it.  Price gives customers clues as to who you are, what you do, who you serve, and ultimately how you perceive yourself.  Mercedes-Benz does not advertise by claiming they have the lowest- and best-priced cars.  Mercedes sells luxury and status, and its customers are willing to pay the higher prices.  Beauty is in the eye of the beholder, and so is value.

So, how do you avoid being the low-cost provider always competing based on price?

  • Focus on the value of your product and services.  Educate the customer on why your product is a better product than a lower-priced competing product.  Emphasize the value and explain why your product is more expensive.  Customers will pay more for a better product that they believe will do the job right.
  • Stop Discounting.  Cutting your price to attract a new customer encourages customers to constantly ask for future price concessions, thereby subsidizing your worst customers at the expense of your best ones.  If customers are attracted by your low price, they will easily leave for another company that offers an even lower one.

Finally:  You don’t want to win the customer award for cutting your prices every year.  You’ll eventually put yourself out of business!


Allen & Company, PC  - a CPA firm serving Kennesaw, Marietta, Acworth, Woodstock and north Atlanta.  Providing accounting, financial statement audit, taxation, and advisory services for individuals and businesses.  Extensive experience working with franchises.