Perhaps not everyone is familiar with the Good-Better-Best approach in business, but we have all experienced it as customers, no matter where we shop. Booking a plane ticket? You’ll have to choose between Economy, Economy-Premium, or Business. Pumping gas? Your options are Regular, Midgrade, or Premium. It is an easy concept to understand, and many businesses across various industries are using this approach, while others are still not offering tiered pricing. The G-B-B strategy has many advantages, and if done right, can bring a lot of extra revenues.Continue reading
Tag: business strategy (Page 1 of 2)
Whether you have experience in online sales or not, you probably know that pricing is often one of the most important criteria for the customer. Of course, we all like a good deal, but pricing also affects our perception of a product. We previously talked about low-cost pricing and premium pricing strategies. But pricing is more complex than that, and getting the price right is one of the most important things in maximizing sales and profits. Different businesses have different products, customers, and competitive environments, so they need the best strategy for their business. Let’s talk about the seven main pricing strategies that apply to Ecommerce and online sales.Continue reading
I have met many aspiring entrepreneurs over the years. While some were quick to start their first business, most were struggling to get started. I have heard many reasons (some would say excuses) why they wanted to start a business but could not: lack of funds, not enough education or experience, or too busy with their job. But the one reason that comes up the most is finding the right idea. It is easy to convince someone that they can start a business without a Harvard MBA or a million dollars in the bank. But getting them to acknowledge they can find a good business idea is more difficult.Continue reading
Starting a business is always an exciting adventure. But after some time, entrepreneurs will begin to wonder, “What’s next?”. The Ansoff Matrix is an easy framework to figure out growth strategies, even though it was created in the 1950s! With the expansion of ecommerce, are these strategies still valid today? Let’s find out!Continue reading
How many competitors do you think you have? Are you sure your environment isn’t more competitive than that? It is easy to underestimate how many competitors a company has. While finding out about direct competitors is easy, the threat of indirect competitors (or threat of substitutes) can be more difficult to evaluate. Ultimately, when does this competition matter, and when is it less of a problem? Let’s find out!Continue reading
Even with a great idea in mind, starting a business is tough. It may require resources, knowledge, capital, and even a permit or license – and existing competitors won’t make your life any easier. Entrepreneurship is an exciting adventure, and we are all attracted by potential profit. But we must consider how tough the barriers to entry are to see if entering a market is technically possible. Even when it is technically possible, entering a new market does not guarantee success. That is why I like to differentiate the two types of barriers to entry: those that prevent access to a market and those that prevent new entrants from having a fighting chance at making a profit.Continue reading
If you shop online, I’m sure you’ve been there: you find an item you really like at a decent price, you add it to your cart, begin checking out, and find out that shipping will add an extra $7 to your bill. What an awful surprise. The idea of paying for shipping greatly upsets you, and you give up on your purchase. Does this sound familiar? I’ve certainly done that many times. In the age of Amazon Prime, should other online businesses offer free shipping? Is charging for shipping a thing of the past?Continue reading
People will buy products that solve their problems and/or make their life better.
That is for me the main idea on what’s an attractive value proposition and I could stop writing here. But as the basketball coach John Wooden said, “It’s the little details that are vital. Little things make big things happen.” Let’s see how the customers evaluate a value proposition, make their decisions, and why this isn’t easy for them.Continue reading
Premium means more than just good quality.
I remember going out with this girl a couple of years ago. She was really into fashion and always wore a stylish outfit. In a conversation, she was very excited to tell me that she was carrying her rare Louis Vuitton purse that day and the story behind that purchase. I know absolutely nothing about fashion, but I know these are not cheap. Sure, her purse looked good. But why was she so excited about it? Was it because of a unique design? Or extremely high-quality materials? What justifies the four-figure price tag?Continue reading
The other day, I ordered a pack of two bottles of a health supplement I wanted to try. Two days later, I received a large cardboard box, inside of which was a smaller box between the bubble wrap. And guess what I found inside the small box? Each bottle was individually packaged in another box! It’s not like I ordered fancy crystal wine glasses; all of this packaging was protecting two small plastic bottles. I am grateful some companies are using more sustainable practices, and I am sure this excess use of packaging will make this company lose its most environmentally-conscious customers. But what can businesses do to minimize their impact on the environment? Besides the ethical issue, how does this affect their bottom line?Continue reading