Sunday, January 31, 2010

Three Basic Reasons People Do Business With Youl

Price, convenience and perception are three basic reasons people do business with you. In a nutshell here is the breakdown of how it works.

People are usually looking for the best price on an item. that makes common sense. But sometimes convenience becomes more important. For example it's not worth the trouble to go to a supermarket for a loaf of "equal" bread even if it's cheaper. You will pay a certain amount more for the convenience of avoiding the supermarket.

The only time that price and convenience are outweighed is when a business has created a perception (true or not) that their products are superior and the price and lack of convenience may be justified. If their product(s) makes you feel good about using it, then you are willing to pay the premium. Examples being Mercedes or Lexus automobiles or something as simple as coffee from Starbucks as opposed to coffee from the corner gas station.

Where does your business fit in? If you are like many small business persons, you really don't fit in any of these. In order to increase your business, you need to decide which category you should position your business in and price your product(s) accordingly.

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