While this is something that you have probably heard, read, or seen being touted quite often. It may have been something that you choose to pay attention to or not. In reality there is actually some good reasons why competing on price will not get you anywhere.
- You may believe that the cheapest price will get you more deals, because people want to save money. This may be true and it will get you a certain number of deals, however at the same time, often the client that wants the cheapest price wants the most for the money. You will often find what you quote and what you end up doing change very much, but the price rarely does.
- Depending on your industry there will always be someone cheaper. You may price yourself as the cheapest web developer in your area, but don’t forget other countries can often offer even better prices then you, and the internet is becoming a much smaller place.
- There may be a group that always take the cheapest price, but then there is also a much larger group who will wipe off the lowest price as not an option, purely for that reason, because it is the cheapest
- If you start out as the cheapest price in town, it can become difficult to justify the price rise later on. Especially when you consider the idea that first impressions count, if you start out as a low price option, and do a good job, and then rise your prices while it may work for you, you will still have a range of people that see you as a low price supplier and will resist a price rise.
No matter what you choose to do, you almost always will find it more difficult to maintain a low cost operation and turn it into a higher priced operation then if you start out mid field and build to be a more expensive option.