Maybe price is not the problem

Business owners often complain that customers constantly ask for discounts. Their products are good, their service is reliable and their prices are competitive. Yet the conversation frequently ends with that familiar question: “Can you give me a better price?”

The reaction is predictable. Perhaps our prices are too high. Maybe competitors are cheaper. So we introduce promotions, offer discounts and slowly chip away at our profit margins. But years in business have taught me something. Sometimes the problem is not your price. You may simply be offering your product to people who do not recognize, appreciate or need the value you provide.

Allow me to illustrate while shamelessly promoting a few businesses.

Bryan Kong and Maxine Kong are behind Now Now Canteen, a contemporary restaurant in Mandaluyong recognized in the Michelin Guide’s Selected category. Their approach to familiar Asian dishes involves fermentation techniques, thoughtful preparation and culinary creativity. Someone accustomed to inexpensive meals might look at their menu and wonder why anyone would pay more when perfectly satisfying food is available elsewhere for less.

Fair enough. Affordable food isn’t wrong. But customers who appreciate culinary craftsmanship, creativity and the dining experience see something different. No wonder the restaurant has attracted such an enthusiastic following. One customer wants to satisfy hunger. Another wants a memorable dining experience. Both are legitimate. They simply value different things.

Consider Jason Qua and his partner’s Signet store, or Hannah’s Fashion Creation. Some shoppers may find their offerings expensive. After all, cheaper alternatives are everywhere. But customers who value distinctive designs, craftsmanship, personalized service and meticulous attention to detail understand what they are paying for.

The question is not merely how much something costs, but what makes it worth the cost.

I experience this in my own work. For years, I have been invited to speak at conferences and lead leadership programs locally and internationally. Naturally, professional fees come up. Some organizations find my fees beyond their budgets, and I respect that. Every organization has financial limitations. Not every engagement is a good fit.

Interestingly, clients organizing major conferences, reaching large audiences or serving international and expatriate communities are often less concerned about securing the lowest fee. They focus on the message’s relevance, the quality of the presentation and the impact it can create. They are not merely paying someone to occupy a stage for an hour or two. They are investing in an experience intended to educate, inspire, challenge and deliver lasting value.

Of course, this places greater responsibility on me to prepare thoroughly and deliver exceptionally well. Charging premium fees does not automatically make someone a premium speaker. A higher price is not a certificate of excellence. And I have learned to accept that not everyone can or should become my client.

This applies to businesses everywhere. When companies attempt to please everybody, they risk losing what makes them distinctive. They lower prices, reduce service, compromise quality and eventually find themselves competing in a marketplace where the only difference is who charges less. That is a dangerous game because somebody will always be willing to sell cheaper.

But there is another side to this discussion. Entrepreneurs must never use premium value as an excuse for arrogance. Sometimes customers question our prices because we haven’t communicated our value. Sometimes our offerings are really  overpriced. And sometimes competitors genuinely deliver better value.

Rather than immediately defend our prices, we should understand what customers actually want. Is it affordability, reliability, convenience, craftsmanship, exclusivity or peace of mind? Different customers value different benefits. The wise entrepreneur understands those differences and serves the appropriate market.

There is also an enormous difference between being expensive and being worth the expense. An overpriced product remains a poor purchase, no matter how impressive its packaging. An expensive service that consistently disappoints customers cannot survive on reputation forever.

Premium pricing creates premium expectations. Businesses must meet those expectations with consistent quality, performance and trustworthy service. That is why businesses should compete primarily on the value they create, not just the prices they charge. It does not mean everybody should charge premium prices. Affordable, dependable products also provide tremendous value to customers who need them. The challenge is to know whom we serve, understand what matters to them and consistently deliver on our promises.

Perhaps entrepreneurs should spend less time chasing customers who will never appreciate their offerings and more time serving those who genuinely need and value what they provide. Because the goal is not to convince everybody to buy from us. The goal is to serve the right customers exceptionally well and earn their continued trust.

Not everyone will appreciate your price because not everyone is looking for the same value. And remember: Never confuse being expensive with being valuable. Price is what you charge. Value is what you deliver. Trust is what you earn when you consistently make the two worthwhile.

Catch Kongversations with Francis on YouTube and all major podcast platforms: Spotify, Apple Podcasts, Google Podcasts and more. Plus, listen to Inspiring Excellence wherever you stream.