One Way to Ruin Your Business (How to Choose Price Point)

Hey everyone,

Over the weekend, my family and I were in Idaho for a couple of days. While we were out and about in one of the towns up there, I spotted this cute little book shop.

“Oh! Let’s go there,” I exclaimed to my wife.

I was really excited to check this bookstore because recently I have been enjoying buying and reading books from thrift stores, and from the looks of it, this was a very similar store.

So come to my surprise, I found that at the front of the store, it had a 1 book for 15 dollars or 2 books for 20 dollars.

Alas, however, my wife and I continued into the store hoping to find a book that we would be interested in that would be worth the money.

After looking through all the entrepreneur and business books, I found no books that really piqued my interest. All of the books in the store were clearly second-hand, and many of them were not kept in great condition.

Despite the fact that there were no recognizable books except for Donald Trump's “The Art of the Deal” and a very worn-down Anne of Green Gables series, and the fact that the books weren’t in pristine condition, there were no books that were being sold for less than 25$.

This, unfortunately, was a deal breaker for me. Why would I spend 25$ or more on a book that chances are I could find at a Savers for a mere fraction of the price, or even order the E-book on Kindle for less money as well.

What this business lacked in its strategy was competitive research.

Why is Competitive research important?

Innovation in gold when it comes to succeeding in business.

Competitive research is the bridge between the success they have and the business strategy that will give you the most success in business.

Competitive research consists of determining your competition:

Say you're a plumbing company in Detroit, what you’d want to do is: Choose a plumbing company in Detroit and ask for a quote:

Then assess some of the following ways they approach their business, and in what way the business can be improved.

How often do they answer the phone? (No need to call multiple times.)

What is the quality of their prices compared to the value of the service they provide?

How long does it take for them to get a quote back to you?

Are they a 24/7 service?

Who do they target? Is there a better target audience?

Questions like these can assist in finding ways to start a business that can stand out from the competition.

Let’s say that when doing research, you find there are no 24/7 plumbers in Detroit.

That means there is a whole target market that is being missed that you can target.

How many homes get a burst pipe in the middle of the night?

In this fake scenario, let's just say that 5 houses every week need a plumber from the hours of Midnight to 6 am.

Because you are the only business that offers the service, that means that all those customers will go to you.

No other competition means that you could charge a higher price because the service is in demand.

However, in the case of this bookstore, she failed to realize that if I wanted to, I could have just gone on the internet and bought most of those same books online for a much cheaper price.

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