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Zach Aldwin Milkshake in the Boardroom
In a tight economy like ours it’s easy for everyone to negotiate for the best price they can get be it for a service, on rentals, food or any other issue. Even the street kids will negotiate over the coins they get. There’s a growing trend in Zimbabwe where many entrepreneurs are forced to close their businesses because they’re competing on price and it’s unsustainable.

They have a great service, but charge too little for their target demographic. Consider doubling your prices.

That sounds ludicrous advice given the current local, as well as world economy. It may also sound strange coming from a man who loathes the idea of being ripped off by someone or hates profiteering simply for sake of it.

Hear me out a little though. There’s a place that charged $3 for a plate of sadza, beef bones, spinach, vegetables, and gravy.

I was so excited. It was my new lunch spot. Not only was the food cheap but the service was great.

They always called me when they had my favourite bits on the menu. But how long could they sustain that price given that they had other expenses such as rent, replacement of equipment and croc- kery?

The problem with competing on price is that it is a fast race to the bottom. Competing on price makes you a generic copycat of everyone else because that is the best you can offer. Telling you to double your price is not telling you to do some random act of mathematics to make yourself more expensive.

Rather, it is telling you to look long and hard at what you are worth, putting a price on that, and then find a group of people who are willing to pay for that worth.

Suddenly you can no longer just be a simple generic “same as everyone else” type of guy. Now you have to up your game to set yourself apart from the rest of the crowd.

When you set yourself apart like this you will leave a large chunk of clients behind. You will leave the people who are looking for the cheapest option or the people who believe that your services should be for free.

Instead you will gain the people who are looking for what only you can do. Suddenly you find yourself working for people to whom you and what you do are indispensable. These are the clients that matter.

Suddenly you get to pick your customers. You get to tell your story to them and they listen to you.

No longer can you operate at a level that barely scrapes civility in operations, you have to execute at a higher level.

Doubling your price will cause your clients to change. Doubling your price forces you to stop pleasing everyone.

Now you only work to please the people who value what you do. Doubling your price forces you to live up to the new standard where you choose to become the only person in your field that people go to because you simply are the best there is.

Pick the area you want to be in, pick your market, write it down and make it clear that “these are the people I do business for”.

A friend of mine is getting married and has been hunting for a wedding venue. Owners of wedding venues in Zimbabwe know who they want as their clients and it shows in their pricing and the way they deal with you.

There are those who specialise in the 500 guest weddings and there are those who are looking to cater for the under a hundred guest parties.

The pricing, the value, the worth offered all add together to say “we can work for you if you fit this category”.

Each one knows its target market; they are not trying to get everyone to have a wedding at their venue, they just cater for the people they want.

If you want a small intimate wedding then the hire fees of the bigger venues tend to make it prohibitive when you come down to budget issues.

Conversely, there are many smaller venues who will tell you up front that they cannot serve more than a hundred guests. That differentiation is perfectly fine.

We need more people who are willing to differentiate and stand out and charge accordingly.

Where will Zimbabwe be in 10 years? It will probably look completely different because of all the new ideas that will shape it.

These ideas will never get off the ground if all we focus on is cost price as opposed to value.

Now, if you’re selling to the dollar a day customer, then yes, you can’t be flexible on price. But you can still be excellent and attract the very best dollar a day customers.

But that is the market you are targeting and selling to, and there is nothing wrong with that. Just remember that there is a lot of competition at that level.

Please do not compete on price. It brings everyone down at the same time. Competing on price is a sign of desperation.

One of the venues my wedding friend contacted had some of the worst reviewss I might add. They offered him a 50 percent discount after he said no to their initial offer. It screamed “Desperate”! If you are not worth anything then charge nothing.

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