B-Reminded – Quality Over Price!

It’s one of the all-time classic business stories about holding your price based on delivering quality.

A Hairdresser in a small town has been charging $25 for haircuts for years and making a fair profit from his work.

A new salon opens up down the road and puts up a huge sign that says “$6 Haircuts!”

The first hairdresser was rattled. He thought it through and realised that if he kept his price at $25 he’d lose a lot of customers to his competition and may not get them back, but if he dropped his price to $6 he might drive the new comer out of business but he’d go broke himself because he couldn’t afford to take $19 off his margin.

What the hairdresser did, that worked outstandingly well, and something that we can all learn from, was this: He kept his haircuts at $25 and put a big sign in his window that said “WE FIX $6 HAIRCUTS!”

If your business adds value to your clients and you are being challenged by competitors discounting, make sure you emphasis all the extra value that you provide and all the things you offer or include that the customer gets for free when they use your products or service.

The reason I write this blog today is that we have had four circumstances so far in November when a B Series consultant has contacted an existing client to see if they need help with any recruitment, and found out that they have a position to fill but that it was made by another recruitment company and had “fallen over” and they were waiting for a replacement under the guarantee. When asked why they did not use us to do the assignment, the unanimous answer was price.

The old adage is true – Buy cheap, buy twice.