Are lower prices more important than good quality?

If you take a student’s view of what immediately precedes a company’s filing for bankruptcy, you will find that three things occur most frequently:

• Prices are slashed to stimulate sales
• Gross margins decline sharply
• Sales revenues approach record levels

Let me ask you an important question: “Which would you rather be, profitable or busy?” Brisk sales do not guarantee fiscal success. Being able to sell at prices higher than your competitors does. I fully appreciate that the lingering malaise in today’s competitive economy makes it difficult to hold your ground on prices. But for the sake of your survival, you must.

When I’ve asked business owners in our industry to describe what their company is best known for, I’ve received answers such as “unmatched quality,” “one-of-a-kind creativity,” “attentive customer care,” and “dependable delivery.” You can argue that those four distinctions translate into likeability, trustworthiness, and delight in the eyes of the customer.

If you aren’t sure which of your value propositions is most appealing to your customer base, take time to conduct market research. For a relatively short period, attach a one-question survey to every packing slip or invoice and encourage your customers to respond to this question:

What was the most compelling reason you chose to do business with us today? (please select only one answer):

1. Low price

2. Superior quality

3. The way you were received and treated before and when placing your order

4. Outstanding after-the-purchase support and service

5. On-time delivery, as promised

6. Uniquely creative design

7. Convenient location and hours of operation

8. In response to a promotion or special offer

9. The easygoing and enjoyable experience of shopping with us alone

—Your Personal Business Trainer