Avoiding the Price Trap: 3 Tips to Succeed as a Mission-Based Business
On this week’s episode of SUCCESS Line, I talk to Maria. Maria quit her job as a project manager two years ago to follow her dreams of starting her own business, a decision she actually made after picking up a copy of SUCCESS magazine.
Maria came on the show with two questions that I’m guessing most entrepreneurs reading this have experienced:
- How can I attract more customers to my business when there are so many cheaper options?
- What should be my strategy for increasing my sales when my competition has much more capital to invest?
These questions are such common ones for smaller businesses competing with big supply chain players. However, they focus on the wrong thing: cost. If you want to free yourself from the competition on price trap, read on for my top three tips to succeed as a mission-based business. I promise, once you decide that you are no longer willing to compete on price alone, your world (and your business) will open up.
1. Get clear on your mission.
Competition on the face of price or cost alone is a losing battle. There will always be people willing to go out of business faster than you are—meaning, they are always willing to cut the price further to edge you out.
So if we know that’s not a sustainable battle, where can you differentiate yourself. Where can you challenge them?
In the heart. A small business’s strengths lie in its passion, commitment to its mission, and the belief that it can do some good in the world. The companies that compete on price are simply looking at their bottom line; they don’t have the same heart.
If we can’t attack them on price, we have to bring our mission, passion and purpose to the forefront on a much bigger level.
Take TOMS. They are not the cheapest shoes, and, personally, I don’t even like the way they look. However, people buy TOMS shoes for a reason: because the company donates a third of their profits to the missions and purposes they are passionate about. People buy the product not because it’s the lowest price, but because they believe in the mission the company stands for.
You have to get extreme clarity on who your company is and what you are trying to accomplish. Your heart is your golden ticket: People are always willing to pay more for something if they believe in it.
2. Attract your tribe.
Once you’ve gotten clear on your mission, you need to identify those consumers who are passionate about the same cause—you need to attract your tribe. Ask yourself, Who is my ideal customer? Where do they spend their free time? How would I reach them? What do they buy?
You don’t need everybody in the world, you just need enough people who are on the same path as you. Niche down to a small subset of people who are passionate about the work you do. Once you do that, everything changes. Your messaging will connect more deeply with those people, and you will likely attract more loyal and devoted customers. The customers who want the cheapest products will always leave you for a lower price. The customers who believe in your purpose, who get to know you and what you want to accomplish, are far more likely to stick around.
How do you attract your tribe? Emotion. Logic makes people think; emotion makes people act. Do an audit of all of your marketing and ask, Am I leading with emotion or logic? Get clear on who your tribe is and then find a way to reach them on a deep, emotional level.
3. Find your tribe a home.
The bonus piece to all of this, the proverbial icing on the cake, is that you need to create a place—a Facebook group, an email newsletter, etc.—where the community you are building can come together.
It is one thing to get your message out and have your customers buy the product. It is another to create a community of like-minded individuals who can share common causes, connect and become loyal customers of your brand.
Think about, What place am I driving these people to, to create a community? If we are not putting our arms around the community we are creating and giving them some love, then we are missing an opportunity to build a higher affinity for our brand. If we leave them in all of the scattered places we found them, it will be much harder to create the loyal community we are trying to build. Furthermore, it is always significantly less expensive to sell to an existing customer than to attract new ones.
If you have a small business like Maria and are trying to compete with big companies, don’t get pulled into the competition on price trap. Figure out who you are and who will identify with your mission, bring them together in a community, and watch your business change.
Ben Fairfield is the Managing Director of SUCCESS Coaching & a SUCCESS Certified Coach.
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