Let's say you get bored this weekend and set up a lemonade stand. You're going to charge $2/glass. There's a lot of people in the neighborhood, and you start to get busy.
Dealing with competition.
The guy across the street sets up his own, and charges only $1/glass. Undercuts you, and all your customers go away. Then, another one, and another, next thing you know, someone is charging $0.25/glass and they're losing money with each glass they sell. Why!!! (Look on Amazon, this happens every day.)
If your lemonade is the same as your competition, you're in trouble. Because now you're a commodity, and everything comes down to price.
And when I say, "the same as theirs", I mean a perceivable difference to the customer. If they can't see a difference, then there is no difference as far as the marketplace is concerned.
How to avoid being a commodity.
All hope isn't lost yet!
Is there anything you can hang your hat on for your price of $2/glass?
Maybe yours is served in a nice "to go" cup with a crazy curly straw.
Your lemonade is made from local lemons, from the trees in your yard.
Natural sweetener.
It's served ice cold.
Maybe you soak the lemon rinds in the juice overnight to absorb the oils and it's delicious.
The lemonade is hand-made by two cute kids with no front teeth.
All proceeds from the sales go to the kids' college fund.
A portion of sales is donated to needy kids.
Now you have a brand!
Why would anyone go to the other lemonade stands if they knew the difference?
A plain white t-shirt.
I heard a cute analogy about a year ago comparing your brand to a "plain white t-shirt". The assumption was, the plain t-shirt is a commodity and there's nothing special about it. I guess they've never heard of True Classic T-shirts. They are literally selling plain white t-shirts for close to $20 each by the millions.
The big question is, do your customers know the difference between your brand and the competition? How would they know? How do you communicate that?
Conflicting gas station prices.
In LA, it's not uncommon to see two gas stations next to each other, with one charging a full $1 or $2 more per gallon than the other. But that's not the crazy part. No, the crazy part is, there's people at that gas station paying $7/gallon! What do they know that we don't know?
If you were the owner of that expensive gas station, wouldn't you want everyone to know why they should fill up at your station? Maybe it's the quality of the gas, the rewards, the service, whatever it is.
In conclusion.
It's not enough to have a good product; you have to communicate that value to your customers. Don't assume everyone knows why your products are so special. If a tree falls in the woods and nobody was there to know why your brand is so unique or valuable, do you make any sales?
댓글