How we paid almost double the price for a cake because of the value-add we received from the shop owner and the marketing lesson for your business.

The chance encounter

A few months back, we celebrated our son’s 2nd birthday at Southbank in Brisbane. We needed a cake and the event organiser recommended we order the cake from a nearby cake shop.

We were not particularly sold on the idea, knowing that it would cost more than some of the freelance cake bakers we knew. But we were in the area so we decided to stop by. The shop owner and baker greeted us and asked about the occasion. We told her it was our son’s 1st birthday party and we wanted an awesome cake for the occasion.

She asked whether we had something in mind. We told her that we had a rough idea and started sharing some of the ideas. She took out her sketch pad and started drawing the cake. We played around with a few ideas. She was a great drawer and could help visualise the different ideas quickly. Plus she had some great ideas on what we could and probably should not do.

Fifteen minutes later, we had the cake on paper. We then asked about the price and she said $600. We said that was a bit above the budget but we would have a think about it and get back to her.

The Value Add

Before sitting down with the cake baker, we knew that we could get the same cake baked by a freelancer / semi-pro cake baker for around $300. But once we had received the consultation and seen her ability in clarifying our vision and achieving our goal, we were too impressed to go elsewhere. Plus we did not want to take the chance with another baker not being able to achieve the desired look.

So we paid $600 for the cake and it turned out wonderful for the party.

How to better market your business

Chances are you don’t run a cake shop. But chances are there are cheaper alternatives in your market. With more pressure from freelancers and offshore suppliers, if you are not differentiating yourself you will get compared largely on price. That is a weak position to be in as there are people who can do a similar (not same) job for less money and money is the most tangible comparison point in customer’s mind.

So how do you differentiate yourself?

By demonstrating that you are an expert and providing more than just a basic level of service. The cake shop owner, for example, demonstrated her ability to create the right vision for our cake. She was also friendly and approachable and did not charge for the consultation. That is, she exceeded our expectation on the quality of her product and her service. In doing so, she gave us something more to compare on other than price.

To give you another example, in our web design and online marketing business in Brisbane, we sit down with our clients and give them ideas on how they can design their website, how they could use content marketing, email marketing, and social media to attract more clients. That is, we don’t just build them a website, we guide them through how that website should look and function for maximum marketing effectiveness. That inspires confidence that we are an expert and trustable supplier.

Sure some people care only about price. But there are many customers who care about other things like skillset, novel ideas and customer service.

It is no longer enough just to be a service provider. You now have to be consultant. You need to differentiate yourself by adding value to client in other ways that are important to clients.

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