I was perusing my favourite business networking community the other day and happened upon a great blog about the impact of design on business success and profitability by I-Change, a change management company.

The blog centres around fascinating research from the Design Councils National Survey of Firms 2005, which serves to bring firmer evidence to the table that good design has a huge impact on the ability of a company to compete in it’s marketplace.

One of the points I-Change have highlighted in the Design Council survey is that two thirds of companies who don’t use design need to compete on price, and out of the companies that make design an important part of their business, only a third compete on price.

The evidence is glaringly obvious that if you want customers to value your products and/or services enough to pay more for them compared to your bargain basement competitors, you’ve got to convince them that you are worth more, and basically design is a huge part of this.

You can read the whole blog at: www.i-change.biz

5 Top Tips For Avoiding Price Wars

1. Don’t bargain. Onced you’ve set prices don’t allow customers to bargain your prices down to ‘their budget’. It’s all good and well offering loyal customers discounts, but make sure that it’s in your control and the offers come from you, rather than allowing customers to ask for discounts and developing a ‘barter culture’ which diminishes your worth in their eyes.

2. Ensure your benefits outstrip those of your cheaper competitors. Ensure you broadcast those benefits to your potential customers; if you don’t tell them the benefits they won’t recognise them and see that there is any difference between you and your competitors.

3. Don’t push prices as a ’selling point’ - ever.

4. Image; project the professional image of a ‘better’ company, this is where design comes into the equation, and should also be used in your marketing materials to highlight the unique benefits which make your brand more valuable than your competitors.

5. Seek ways to add more value to your product and/or service. Add-ons which benefit the customer may not cost alot more, but are priceless in terms of strengthening your brand position and improving the perceived value of your products/services. The improved brand perception will allow for higher prices which will more than compensate for the cost of any add-ons.

This entry was posted on Sunday, December 9th, 2007 at 11:39 am and is filed under Thoughts on Design. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.