Why You Should Resist the Siren Song of Low-Balling Your Prices

You’re at an important trade show you can barely afford, you’re feeling like an imposter, and two Russian dudes approach you with this:

“We’ve been watching you. You’ll never make it now that we’ve decided to take on this market. Starting tomorrow, we’re cutting our prices in half and targeting your clients first. There’s no way you can stay in business because we have a longer runway than you.”

When this happened to me in my first business, I was one of only a handful of tech entrepreneurs in my niche, and I’m sure they thought they could intimidate me.

But the opposite happened.

I remember feeling a surge of adrenaline as I looked them right in the eye and said, “Bring it. You don’t understand this market. I’m not offering a commodity and price is not the deciding factor.”

Of course, I sounded more certain than I felt.

But I decided to double-down on differentiation and find more ways to add value to our solutions instead of trying to match their unsustainable discounted price.

It worked.

That’s when my business really took off, and about a year later I heard those guys had closed up shop.

Never run the race to offer the lowest price.

Differentiation always beats commoditization.

Remember when you used to LOVE your business? Find out how to leverage your brain and manage your mind in my bestselling book, Loving Your Business. Separate your identity from your business and turn it into a scalable asset that can run without you. That’s a business you’ll love – and other people will too. Get the first chapter here!

 

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