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8 So-Obvious-They-Hurt Reasons To Target Rich Customers
Would you rather have customers that spend $5 or $500 each time? If you answered $500 then you've got a better chance of being a success. Here are 8 so-obvious-they-hurt reason why this is true...
You want to hope and pray you never get into a price war � it�s one of the biggest business killers out there. Real commercial suicide!
As you and your competition continually under cut each other, your profit margins soon spiral downward. You either need the cojones to go the lowest, so you get all the customers but make a loss on each one and go out of business. Or, you bottle it when the price goes too low and your competition gets all the customers and you go out of business.
Either way you�re up the proverbial creek without a paddle.
So how do you avoid this?
You don�t focus on price as your unique selling point (USP). Instead you position yourself as the market leader in quality. People are happy to pay for quality, so you can charge a premium price in your industry.
When everyone else enters into a mutually destructive price war, fighting for the bargain basement customers, you�ll be sitting pretty as you continually attract the cream of the crop that are happy to pay for your quality offering.
2. They Creates The Chance Of A Price Increase War
As briefly mentioned above, when you position yourself as the quality option in your market. You immediately standout and those customers who want quality will be happy to pay your premium.
If someone attempts to challenge your niche title, they�re going to have to out-price you to claim the title. So what do you do? You raise your prices too!
Now that�s the type of price war you want to be involved in!
3. They Give You More Room To Create Special Offers
If you�re charging a premium for your services, you�re more likely to get a higher profit margin. You could either just bank this, which is always great, or you could use it to fund adding free bonuses to your services.
You may find that by using some of your profits for extra promotions, you�ll convert more customers and overall make more money.
You bargain basement competition won�t have the breathing space of your profit margins to compete with your bonuses.
4. They�re Less Likely To Complain
Because you�re positioning yourself as the quality product, and charging a premium for it, you�re going to have to deliver on your promises. You�ll soon lose your credibility if you don�t.
What this means is you�re going to be working harder to create a great customer experience, and that means that you�re going to get less complaints.
This means that you�ll have less refunds, and have to spend less time and money dealing with customer service. Let your bargain basement competition fight over the complainers and time wasters instead.
5. They�re More Likely To Buy Again
Now you�re positioned as the quality option, and you make sure your product delivers a great service, you�ll find that if you offer a new service to your customers, they�re more likely to trust you and buy from you again.
This is great because you don�t have to market to a brand new customer, and overcome all their objections first. You have a ready built database of people who are happy to pay you a premium for your services.
6. They�re More Likely To Refer Similar People
Hand in hand with the point above, your customers are likely to know and socialise with similar minded people. By delivering a superior service your customers are more likely to refer their friends.
These friends are statistically more likely to buy because a personal recommendation is the strongest motivator for people to buy.
7. They�re Easier To Manage
Here�s a point that some people don�t quite grasp first time as being a benefit. If you�re the premium service in a market, you may find that you�ll attract less customers than the mass market company in your market.
However, this can be a good thing. Less people in your database means less work looking after them, which means you don�t have to spend anywhere near as much on your customer service department.
It also means you can concentrate more time and effort on your customers in creating a lifetime�s relationship.
Having a smaller database that are well looked after, and happier to spend more money to get quality can be far more valuable than a massive database of customers looking for the best bargain � they take more looking after and will leave you at the drop of a hat when a cheaper option comes along.
8. They Let You Out Advertise Your Competition
By charging a premium the chances are you�re making more profit per customer. This means you can afford to pay more to get that customer. This means you can afford to advertise in places that your competition couldn�t afford to. This means you have a great chance of increasing your market share.
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