Nigerian entrepreneur and founder of NairaBet, Akin Alabi, has addressed the issue of slashing of prices to entice and attract customers, in one of his many business lessons.
The businessman in a video posted on his Twitter page advised entrepreneurs not to give in to the urge to slash their prices as this is one of the policies that kill a business faster.
A sales slash helps no one: According to Alabi, many customers are not fascinated about the slash in sales price but are rather bothered about the quality of the deals they are getting.
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Focus on quality of product and not price: He advised entrepreneurs and business owners to focus on offering the best deals to their customers as that keeps them coming back.
He said, “I want you to think about this before you reduce your price. It’s a slippery slope and once you lower your prices, you won’t be able to get out of the slippery slope.
Because it is possible that your competitor is going to respond to that and lower his price as well, then what are you going to do? You respond, you lower your price even more and he responds by lowering his own price. Then you all go out of business, nobody wins, you all lose. Even the customer won’t win because there will be no business to patronize.
What I want you to have at the back of your mind is that people are actually not looking for the lowest prices. People are looking at what they perceive as the best deals; people would rather pay more if they feel they are getting a great deal, if they feel they ripping you, the seller off, than paying less if they feel the seller is ripping them off. Did you get that?
People will rather pay more when they feel they are ripping off the seller than paying less when they feel the seller is ripping them off. People are looking for the best deals, not the lowest prices.
Many times, the best deal is the lowest price, I get that, so that can confuse people, but what you should have at the back of your mind is how you are going to make the product you offer look like the best deal ever, that they won’t find somewhere else.
Maybe great bonuses, great services, return policy, guarantee service policy, just make it a mouthwatering service they won’t be able to refuse. You would be surprised by how they are able to stick with you even though you have a higher price.”
See video below.
Don’t go into a price war. People are looking for the best deals. Make your offer look so good your customer will say, I have to be the biggest idiot if I don’t take up this offer. pic.twitter.com/K8YF8uQrOG
— Oloye Akin Alabi (@akinalabi) July 10, 2019
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