Macy’s versus K-Mart. Ferrari versus Honda. Apple versus eMachines.
What comes to mind when you think about these comparisons? Words like expensive, high quality, and classy likely come to mind when you think about Macy’s, Ferrari, and Apple. On the other hand, K-Mart, Honda, and eMachines probably generate thoughts like value or affordability.
Many people prefer to purchase from pricier, more exclusive brands. Others seek value and affordability over exclusivity. And there is no “right” or “wrong” answer here. In fact, all six of the companies I mentioned have built profitable businesses on the backs of their brand.
But here is what’s interesting—all I have to do is mention “Macy’s versus K-Mart”, and the vast majority of you immediately know where you stand in that comparison. Why? Because both businesses have firmly positioned themselves within their market. If you want affordability, you’re going to K-Mart. If you’re willing to spend more for trendier fashions, you’re choosing Macy’s.
So here is the question that matters to you, as a business owner: how does your brand position you within your market?
Are you considered high-end? Or are you considered cheap and affordable?
As a small business, the vast majority of the time it is a mistake to brand yourself as cheap and affordable. It’s simply too hard to build a highly profitable business when you have a miniscule profit margin. The exception is if you have such great economies of scale which allow you to make up for a small profit margin with an overwhelming sales volume.
The other major problem with branding yourself as a low-cost option is that, as soon as someone comes along who can undercut your prices, you’ll lose a large percentage of your customers.
That’s why our goal is to build a unique and high-end brand for each of our clients. We work to turn business owners into celebrity experts within their market—allowing them to charge premium rates while still bringing in business.
Take a moment now and evaluate your brand. Are you a “low price leader”… or does your brand position you as a top-end business within your market? If you’d like to learn more about this concept, please get in touch with me today!