Before your eyes start to glaze over…. There are two main strategies that can be simply explained as follows: Low Cost = Producing goods or services at a lower cost than your competitors and focuses on volume of goods sold. Differentiation = Producing goods or services that are unique and have a high value. They must be perceived as better than what your competitors are offering for your customers to pay the higher price tag.
In the services industry it’s difficult for a business to show their uniqueness and explain why a customer should pay more. However, it’s super simple to show that you are a low cost provider! Often people starting out in business will start with a low cost strategy because they are hunting for clients. They are working from home, are a ‘one man band’ and can use all of the low cost/free tech. The problem with this is that you need volume to grow and make good profits! As you grow, your costs increase, you need to hire people or pay for increased use of tech/Apps and you need better systems and processes.
The issue is, if you are in a highly competitive industry, and you want to be low-cost it’s very easy for someone to come along and copy your strategy or delivery methods…or even your marketing. Anyone can undercut your pricing at any time! This creates the race to the bottom. Where, to keep your business profitable, you start cutting corners or dropping parts of the service….alternatively, your profits start to drop, you can’t pay all of your bills each month or take home a decent pay.
If you want to grow, you need to get your marketing message very clear and us business owners, wearing all ‘the hats’ in business don’t have time to also be experts in marketing. Here’s permission to outsource your marketing so you can focus on your service strategy, whether it be low cost or differentiation!
If your strategy is low cost, then that’s your focus and go all in! Here are our top tips for a low cost strategy.
Keep your processes lean
Operate online
Use tech to automate as much as possible
Keep an eye on industry trends and your competitors
Outsource your marketing
Review your costs regularly
Standardise your service offering
