The Most Powerful Way To Grow A Business
Lets begin with a business principal that is behind many if not most of Americas greatest fortunes.
It may be the most important secret a businessman can know, for it is the most powerful and most reliable way to make a small business grow. If you think about your own business-building experience or study the early histories of businesses you admire you will have encountered this marketing strategy.
Yet its hardly ever talked about. And its often overlooked.
Nothing Sells Better than Price
However valuable your product is . . . however clever your marketing . . . nothing will grow your customer base faster than under pricing the competition.
Lets look at history.
Consider How Many Billion-Dollar Fortunes Were Created By Cheap Pricing
Rockefeller dominated the oil industry by buying up production and delivery and thus being able to offer oil and gas at prices his competitors couldnt touch. And by keeping the prices of these fuels relatively low during his reign, Standard Oil increased the size of the natural fuels market tremendously. Because oil and gas were cheap, people used more of them.
Likewise, Andrew Carnegie made a fortune by producing inexpensive steel. Marshall Field brought down the cost of retail shopping. Sam Walton is known for his discount stores, Henry Ford for making autos within financial reach of the average person, and the Mellons for making money cheap.
To break into a competitive market, you need either (a) a big advertising budget (to establish demand for your product) or (b) a way to sell your product/service CHEAP so word will spread on its own.
If You Want To Make Your Business Successful, Under Price Your Competitors
This may seem too obvious to mention, yet it appears in few marketing books, seminars or audio tapes. I simply dont remember reading or hearing advice of this sort ever.
I remember when I first got into the newsletter business. I was hired to run the newsletters themselves as editorial director. The marketing director had created a growth strategy based on the large company she came from. She favored expensive products and high prices. We were going nowhere.
One day my boss came into my office to tell me he had fired this woman and wanted me to help him grow the company. I told him I knew nothing about selling newsletters. He admitted he didnt either, but he had an idea that it might be like selling bagels.
In the next six months we reformatted the letters making them cheaper to produce and slashed our prices. Instead of charging $200 per subscription we were asking for only $39.
Our competitors were not happy, but it worked wonders. We were profitable almost immediately. Within 12 months the business went from less than $500,000 in revenues to more than $5 million. Five years later we were one of the largest newsletter publishers of our kind, with sales topping $50 million.
Now there were a lot of things we did wrong along the way. But growing and making money werent two of them.
How Does This Apply to You?
If you are starting a new business or thinking of starting one, youd be crazy not to make this a core part of your growth and marketing strategy. If your business is mature, this is still the single strongest way to introduce a new product or product line or to enter a new market.