Cheap
By Jim Logan • May 28th, 2007 • Category: Featured Post
What if I told you the products and services my company offers is cheaper than the competition? Would you hear they’re less expensive or would you hear they’re inferior? Cheaper is a word you hear all the time in business, marketing, and sales - I don’t like it. To say you’re cheaper than a competing solution leaves a negative feeling with many people. My first thought is inferior.
When describing your offering you can be: less expensive, the most cost conscious, the greatest value, the price leader, etc. But you should never be cheap, cheaper or the cheapest. And you should never use those words in business, unless you’re speaking to the inferior position of your competitor.
What do you think? Do you agree with me that the words cheap, cheaper, and cheapest shouldn't be used when speaking about your own products and services or am I making something out of nothing?
Jim Logan is the founder of JS Logan, a B2B lead generation and sales acceleration company. Click Here and discover what makes JS Logan different from other B2B complex sales and marketing firms.
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Jim
Not sure I agree. SouthWest has always claimed “Cheap fares and low fares are just the beginning” and its worked well. Wal Mart is known to be “cheap” - no problem there either.
Some small businesses thrive and wear “cheap” as a badge of pride.
Hey Jim;
I use that word as a consumer, but not as a business man or writer.
For example, “It is cheaper on Amazon.”
I prefer economical as an alternative term.
Mike
Mukund: Interesting thoughts. I occasionally shop at WalMart and fly Southwest.
Southwest and Walmart are highly successful companies. And the word cheap is associated with both. Interestingly, JetBlue and Target are successful, similarly priced, and unassociated with the word cheap.
When I hear the word cheap I think of peanuts, plastic forks, and a can of soda. Cheap seats at the game are high and often have obstructed views. Traveling on the cheap usually means eating sandwiches in the car and making a sacrifice on the number of stops. A cheap date is…well, cheap. And I have a friend who’s notoriously cheap and never picks up the bill when we go out.
I’m not sure any of that means anything :-) But it’s interesting to think about.
Thanks for the comment!
Hi Jim, I agree with you completely. The word cheap does, for me, evoke sensations of inferiority (and plastic forks, etc). You nailed it on the head when you called attention to a sacrifice associated with choosing the cheaper route. When a product goes up in quality, whether at Wal-Mart, Target, Best Buy, whatever, the price goes up–and it is set. Look at the XBox360 or Nintendo Wii; doesn’t matter if you go to Wal-Mart or the local gaming store, the price is the same.
Vis a vis, your post, for clients it becomes a question of how much they’re willing to sacrifice for an inferior product; because if it’s cheap, there’s a reason. For some though, having the cheapest is the only solution to their need. (Hence, the stellar results of Wal-Mart and Southwest. Very real demand at lower costs. No surprises there thanks to basic economic theory). In some cases, business processes demand a higher quality too.
I suppose for vendors on the cheap side, it would still be important to make sure (as Southwest does) that the ’solution is positioned as the best value in the market because…’. There are TONS of work arounds for this, and really any half-competent person in sales should be able to justify a company’s position–even if it is lame enough to be straight out “cheaper” (on its website, sales lit, etc). Interesting post, Jim.
Hi,
Great post and I totally agree with you. Everyone knows that quality costs money. I have been getting quite a bit of flak, because my domain suggestion service (http://grabagooddomain.com) is more expensive than some of the other options available. The thing is that you get what you pay for and for this reason I DON’T want to be cheap and I don’t want customers that are being cheap ether.
I totally agree. I would avoid the word cheaper. I would just say that your product costs less than your competitors.
Relevant NY Times article to review
http://www.nytimes.com/2007/05/30/business/media/30walmart.html?ex=1338177600&en=dd22b1dad8bf8f83&ei=5088&partner=rssnyt&emc=rss
Mukund: Great link! Thanks for finding it and sharing it with us…it’s incredibly timely and relevant. I’m glad I wrote this post before the article you linked us to :-)
Here’s a quote that gives the gist of the article, a report in a study conducted by a Wal-Mart ad agency:
“A confidential report prepared for senior executives at Wal-Mart Stores concludes, in stark terms, that the chain’s traditional strengths — its reputation for discounts, its all-in-one shopping format and its enormous selection — “work against us†as it tries to move upscale.
As a result, the report says, the chain “is not seen as a smart choice†for clothing, home décor, electronics, prescriptions and groceries, categories the retailer has identified as priorities as it tries to turn around its slipping store sales,…
Wal-Mart’s 200,000-square-foot stores, brightly lighted, minimally decorated and teeming with signs for price rollbacks, have served the chain well for much of the last 40 years.
But now, as Wal-Mart experiments with contemporary clothing, flat-screen televisions and nine-layer lasagna, that format has become a hindrance.”
Cheap is OK if you can walk the talk. It’s also an expensive option. I can live cheap as I’m a one man business…I can also offer great value to my clients die to the flexibility I have in managing my time and outputs. In so doing, cheap all of a sudden becomes bloody good value!
[...] But it’s cheap. [...]