THE LESSONS LEARNED FROM THE TEST

The lesson for us is that price is ONLY factor in a purchasing decision 40% of time --- half of those people will always choose cheapest product, and other half will always choose most expensive.

The remaining 60% of consumers in marketplace are more interested in determining value of a particular product and making their decision based upon how they perceive value of product they are considering.

As a businessperson, slash salesperson, you must learn to build value into your product offerings. The more value your customers perceive, more they will be willing to pay for your products.

Sure, you could decide to cater to 20% who want to buy cheapest every time, or to cater to 20% who want to buy most expensive. The decision is your own. But by building value into your product, you can cater to 60% and pick up a few more from upper and lower extremes.

BREAKING THE 20-60-20 RULE

Amazingly, one city in America defies "20-60-20 rule!" In this city there is a manager of a retail store, whom I know personally.

According to him, "20-60-20 rule" does not apply to his city. According to him, every person in his city buys cheapest product every time. So, in his delusion, he believes he must low book every product in his inventory!

No wonder his store sales average is dropping every year! He is giving away his profits because he believes that his city is different from every other city in America.

He is in fact wielding a two-edged sword. By teaching his customers that his store is a low-cost merchandiser, he is condemning himself to having to continue to compete only on price! By competing only on price, he is backing himself into a corner that assures that he has to compete with Wal-Mart.

The truth is that no small store can compete with Wal-Mart on price alone. The only way to defeat Wal-Mart is to beat them on value, since small business cannot buy products in quantity needed to get Wal-Mart prices!

A FOOL AND HIS MONEY ARE SOON PARTED

The fool who decides that they must compete with big merchandisers on price alone has sown seeds of their own destruction.

In deciding to be a low-cost merchandiser, one has ignored fact that big boys can offer those low prices only because they turn a much higher volume than their competitors.

By forgetting this important lesson, little guy who wants to compete with big boys on price alone is doomed to business failure, because he will not be able to cover his costs of operation and he will end up foregoing all profit.

Don't be a fool. Cater to 60% instead of 40%, so that you can joyfully count your profits rather than your losses.

John Calder is the owner/editor of The Ezine Dot Net. Subscribe Today and get real information YOU can use to help build your online business today! http://www.TheEzine.Net

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