Summary: Most value-based businesses hate the idea of price-cutters -- those who go into a market, offering a low price (often for an inferior product,) while pretending it's all the same. But price-cutters have always existed and there's always been a market for them. So what place do price-cutters really fill in the current economy?<br> <br> <br> <br> David: Hi, and welcome to the podcast today. Cohost Chris Templeton, and I will be talking about the value and worthiness of price-cutters in business. Welcome back, Chris.<br> <br> Chris: Hi David. You know, one of the things that seems to frustrate salespeople more than anything else are price-cutters. Some people complain about them. Some people buy from them and some do both. They complain about their competitors who cut prices, but then they buy from the price-cutters who sell to them. What is up with that?<br> <br> David: Good question. What is up with that? I think there are people who sometimes get lost in whatever's going on. We touched on this in a previous podcast, but particularly when things are challenging in business, the idea of price-cutting, the idea of going for the lowest cost alternative can be appealing. And there are a lot of people who I think have made really difficult, tough, and just flat out wrong decisions about moving things forward in their business, by simply cutting price, by going with lower cost alternatives, that aren't nearly as good hoping that they're going to be as good. And it just doesn't usually happen like that.<br> <br> Chris: You know, when I got together with my wife, she was buying, for herself, Ferragamo shoes, which were, even 30 years ago, $200, $300. And she wanted me to buy those high end shoes. And I was like, "Oh honey, this is not a good idea, not a good use of money." And then she said, "no, you're buying a nice pair of shoes." And three or four resoles later, they are so comfortable, and such a pleasure to wear, we somehow in the process of price-cutting, give up on the idea of the full value of what we're buying. Don't you think?<br> <br> David: Yeah, I think a lot of people do. And I mean that's, to some extent, an extreme example, not completely extreme, but there are some people who are always going to go for the highest quality product. And that's great. I remember Dan Kennedy, marketing guy, was talking about this one time. And he was saying that in every market, there are people who will always stay at the top hotel, the Ritz Carlton of whatever that particular city is. Regardless of what city they're going to,.they're always going to stay at the most expensive hotel. Similarly, there are people who will always stay at the lowest cost alternative. They'll always stay at the Motel Six or whatever the lowest cost alternative is in a market. And of course the bulk of people fall somewhere in between.<br> <br> Chris: Right.<br> <br> David: And then the question becomes -- and this is what I thought was brilliant about his comment -- who do you want to build hotels for?<br> <br> Chris: (Laughs) Wait, wait, let me think about this one for a minute,<br> <br> David: Right? Yeah. Who do you want to build hotels for? And I thought about that in my own business so many times over the years. "Who do you want to build this for?" And for me, the types of clients that I love, the types of clients that I really enjoy working with are smart. They're focused. They think. They're willing to engage in conversations. They don't just accept the lowest common denominator as an alternative. They're willing to engage. They're willing to invest in themselves and their businesses, growing things. And those are the types of people that I build my businesses to accommodate. So when there are people who come along and they ...
