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How to Avoid Competing on Price
Like so many software success stories, BlackSquare, started by developing software to solve its own problem (managing a web-based wine club), and then realized that a whole lot of other people could benefit from it too.
Two years later they have clients all over the world, and are know as the “Shopify of wine sales”. (Hear my interview with Shopify here.)
If you can’t compete on price…
We all know that it is hard to compete on price (although eliminating layers of middlemen can work, as it has for BuildDirect.ca for example) , so how the heck can you woo customers online if you don’t have the best prices?
Sell Experiences, Not Products
Today’s interview subject, BlackSquare, has figured out the secret: put together bundles of products and services that only you can offer. Then people will pay more for the overall package than they would have for the individual items.
With a wine club, for instance, you can include wines that are limited production runs, or that they can’t get in local liquor stores, along with exclusive wine tasting event invitations. By putting together an attractive package, you can build your expensive shipping costs into the bundle and people won’t blink even though they’d balk if you split out the cost of shipping.
Other Key Marketing Lessons
1. Aim For a Recurring Revenue Model
If you give people a reason to “subscribe” and pay regularly, you don’t have the hassle of constantly having to chase after new sales.
2. Cut Out the Middlemen
When I teach this in business school classes, we call it “disintermediation”. Whatever you call it, getting rid of the layers between you and the ultimate user of your products will save you and your customer time and money, and it gives you a much better idea of what your ultimate users are actually experiencing and how you can improve your offering.
3. Accept That It Takes Staff to Run an E-Commerce Store
Some of our other interviewees, like last episode’s Brandon Forder of the Pet Connection, have said they consider opening an online e-commerce store in the same way they would opening a physical store. That means you will need extra staff, even if it is just one person to start with.
If you like this podcast and/or these blog posts, why not tell your friends and colleagues? Do it now!
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By Tema FrankLike so many software success stories, BlackSquare, started by developing software to solve its own problem (managing a web-based wine club), and then realized that a whole lot of other people could benefit from it too.
Two years later they have clients all over the world, and are know as the “Shopify of wine sales”. (Hear my interview with Shopify here.)
If you can’t compete on price…
We all know that it is hard to compete on price (although eliminating layers of middlemen can work, as it has for BuildDirect.ca for example) , so how the heck can you woo customers online if you don’t have the best prices?
Sell Experiences, Not Products
Today’s interview subject, BlackSquare, has figured out the secret: put together bundles of products and services that only you can offer. Then people will pay more for the overall package than they would have for the individual items.
With a wine club, for instance, you can include wines that are limited production runs, or that they can’t get in local liquor stores, along with exclusive wine tasting event invitations. By putting together an attractive package, you can build your expensive shipping costs into the bundle and people won’t blink even though they’d balk if you split out the cost of shipping.
Other Key Marketing Lessons
1. Aim For a Recurring Revenue Model
If you give people a reason to “subscribe” and pay regularly, you don’t have the hassle of constantly having to chase after new sales.
2. Cut Out the Middlemen
When I teach this in business school classes, we call it “disintermediation”. Whatever you call it, getting rid of the layers between you and the ultimate user of your products will save you and your customer time and money, and it gives you a much better idea of what your ultimate users are actually experiencing and how you can improve your offering.
3. Accept That It Takes Staff to Run an E-Commerce Store
Some of our other interviewees, like last episode’s Brandon Forder of the Pet Connection, have said they consider opening an online e-commerce store in the same way they would opening a physical store. That means you will need extra staff, even if it is just one person to start with.
If you like this podcast and/or these blog posts, why not tell your friends and colleagues? Do it now!