Are you still competing on price?

April 23, 2009 – 2:27 pm

Thanks Bob Burg for sharing this gem during a talk in Texas this week.  Your passion to build value challenges me. 

“It is unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
      —John Ruskin, English critic, essayist, & reformer (1819 – 1900)

  1. One Response to “Are you still competing on price?”

  2. Yeah, but it’s one thing to be full of shit on stage and in books and then to turn around and completely go against it:

    “Now, you could pay way too much. And you SHOULD charge your customers too much. But I like you. I really really like you. So I’ll make an exception and cut the price in half. No wait, sign up now and I’ll cut even that in half. Again! Now come on, don’t you know what it takes to close - slashing to the bare bones to get the customer and then upsell them later on other projects/services/books/speaches?”

    If you want actual business analysis from someone other than slimy vendor whores, go pick up this months (May) edition of Harvard Business Review - there is an article in there that talks about when you should be giving stuff away, when it should be cheap and when it should charge a lot. It takes into accounts other variables such as if you’re a startup, if you are mature, your brand recognition, and what makes sense at what stage for which rate of growth and profitability.

    Not taking anything from Erick’s dad, just saying there is a case to be made for competing on price for things that are not essential to your profits because they bolster other areas of your business.

    -Vlad

    By Vlad Mazek on Apr 24, 2009

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