Why You Shouldn’t Strive to Be the Cheapest

why you shouldn't be the cheapest small business in your industry
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

By Jess Dixon

When you first launch your business or set out on your self-employment journey, it’s natural to be worried about where your work is going to come from. After all, if there are so many other companies and freelancers out there doing what you do – many of them with far more experience – why should anyone choose you? Well – lots of reasons. But we’ll get into that in a minute. 

At this point, many new business owners and freelancers decide that the only way they can get work is to make themselves the cheapest around. But this is a big mistake, for two main reasons:

First, someone else will always be able to do it cheaper. Let’s say that you take a job that should normally cost £100, and offer to do it for £20. Sounds great, except that there will always be someone cheaper. That guy on Fiverr will do it for, well, a fiver. Their sister’s husband’s cousin’s niece is studying a related field at university and will do it for nothing for her portfolio. 

If you’re dealing with the type of client who just wants the cheapest possible option, you’re not dealing with a client who wants quality work. Someone who haggles with you by using the “someone else can do it cheaper” line is going to be far more trouble than they’re worth. Move on. 

Second, constant undercutting will damage your business in the long run. Let’s say you take on that super cheap job and do it really well (which you will, because you’re awesome.) As a result, the client tells everyone they know that you did a great job and it only cost them £20! The result? More business, yes, but the wrong kind of business. If someone hears that you worked for their friend for 20% of market rate, they’re unlikely to suddenly pay you 100%. 

All you end up having to do is complete more work at absurdly cheap rates. In other words, working harder and working longer hours for less money. Once you get into this cycle, it can be really hard to get out of. It’s best to avoid it altogether. 

So what should you do instead? Don’t focus on being cheap, focus on being good value. 

Therefore, start by asking yourself why prospective clients should choose you. 

Chances are there are numerous great reasons why someone should choose you for their project. Perhaps you have a fantastic understanding of their industry and niche due to past work experience. Perhaps you’re local to them – people love local businesses, especially if they’re trying to tap into the local market. Maybe you met at an event or networking meeting and your personalities gelled really well together or you really “got” their vision. Or maybe a friend they trust recommended you. So many reasons! 

With each new client, have these reasons at the forefront of your mind when you go to give them a quote. Be absolutely clear on what you’re offering and what your prospective client will be getting for their money, and be ready to articulate that. 

At the heart of all of this is value. If a client is going to invest money and time in working with you, they want to know that they’ll be getting good value out of the exchange. So instead of worrying whether someone else could do it cheaper (the answer is always yes,) focus on making sure that they’ll be getting a stellar return on their investment. 

Pricing is just one piece of the larger puzzle when it comes to getting clients to hire you. Skills, experience, personality, proximity, and the nebulous but important notion of “clicking” with someone all play a part, too. For a good client, they’ll be at least as significant as the number on the bottom line. 

In other words: strive to be the best, not the cheapest! 

Take a look at another post that may interest you – ‘The Race to the Bottom’ by Marc Ford MBA

More from Marketing..

the small business owners guide to procrastination and getting things done now rather than later
 

A Small Business Owners’ Guide to Beating Procrastination

Have you ever started the day full of good intentions, only to realise that it’s suddenly 3pm and you haven’t achieved anything? Yes – me too. Procrastination gets the best of all of us sometimes, and it can be a real problem for small business owners. 

why you shouldn't be the cheapest small business in your industry
 

Why You Shouldn’t Strive to Be the Cheapest

If you’re in small business, this is a race you don’t want to win…the race to the bottom and being the cheapest in your industry

what to do when the customer is wrong - small business magazine ybkbs
 

What to Do When the Customer is Wrong

If there is one business cliche that I want to consign to the past where it belongs, it’s this: the customer is always right. 

Why? Because it’s not true. 

Listen to Our Podcast...