Use Convenience to Provide Value to Your Customers

Too often businesses resort to price cutting strategies in their attempt to woo customers and to compete more effectively. Businesses lower prices in reaction to price wars or in an attempt to increase their market share. While this strategy does force your business to review costs in order to reduce them as much as possible, your margins may be reduced and the likelihood exists that a competitor will at least match your price and possibly price even lower than you. This scenario leaves you in worse shape because to maintain your margin you may have reduced your costs by lowering services, personnel, and as a consequence, the morale of your organization. You also lose the competitive advantage you originally sought in the first place. Competing on price is the poorest way to compete.

The Best Way to Compete

If competing by price is ineffective, how do you compete? Customers have always been willing to pay more for value. In other words, do they receive more benefit out of the product or service than what they paid for? If customers shopped on price alone, we would all be driving the cheapest cars, buy generic products, only watch network tv, and wear plain, inexpensive clothing. This obviously doesn't happen, so consumers must also be willing to spend more on goods and services that provide extra value to them.

So what do people value? Today, many people face poverty of time issues - excessive demands on already busy lifestyles. Businesses that provide convenience to their customers that relieve peoples' busy lifestyles are perceived as having a great deal of value. Convenience is a value that people appreciate and for which they will pay higher than average prices.

If you don't believe this, think about your last visit to a convenience store. What made the convenience store convenient? The store was located near where you work or live. It was easy to drive or walk to. You could park by the entrance. The store carried 80% of the items that supermarkets carry - addressing most of your needs. The store was small, so you didn't have to spend a great deal of time negotiating your way around the store. The checkout lines were short so once you choose your purchases you could get out quickly. Convenience stores are usually open long hours - up to 24 hours a day, seven days a week. For all that convenience, how much do you pay for items at a convenience store? A great deal more than you would at your local supermarket!

Using the Convenience Store Model

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