Should small businesses compete based on lowering their prices? Here is my personal story on why you should never do that.
When I first started my jewelry business in my early 20s on Etsy, I did not think much about it. I just wanted to have a space where I can be creative.
I applied the basic marketing principles I learned in college, I crafted the best copy I could write, and saved up for a Canon digital camera so that I could take sharp, beautiful pictures of my products.
When it comes to setting prices, I thought setting a lower price would mean I can compete better with brands who have been out there for a longer time.
If you pay peanuts, you get monkeys.
Having a low price did not justify the work and craftsmanship infused in each piece of my creation. My design was already unique, there was no reason to short-sell it. By having a low price, it did not allow me to take pride in my work.
Having a low price hurt my brand image. I felt I was stuck in a lower price range where the customers I received were not the ideal people I wanted to serve or do business with. For some reason, I had a lot of clients lying about not receiving their packages and demanding refunds when the tracking evidence showed they did receive their orders. I had unreasonable clients who do not understand what handmade means, demanding delivery in 1 – 2 days when it takes a few days to create each piece of jewelry. The constant need to have to manage these customers also drained me of my energy to manage the business and create better work.
In the end, it negatively affected my mentality, because the work is not inspiring, and I felt the need to elevate the brand, to attract clients I want to work with, to do work that means something to me.
I am fortunate that my business and marketing background allowed me to see these mistakes that I made and quickly rectify them. I eventually adjusted my pricing, but more than ever, I was trying to find ways to make sure my brand stands out and that I could convince clients why they should pay more.
Enter brand storytelling.
By weaving a story of how each artisanal piece is created, by anchoring to values I believe in and advocate, by making sure my website layout, design and my copywriting are aligned, clients not only flocked to me, they stayed with me. I created a tribe of like-minded ladies who are connected to my brand, who love my work, who support me, who help me spread the word of my creations.
Even without paying to advertise, I am slowly but surely cultivating an audience base, with high engagement, drawing positive response.
The support from social media is something every business craves and needs. I never used to believe in it, thinking it is all paid for, but after personally witnessing the power of having loyalty from my audience, and having their love, that is priceless. It motivates me to want to bring better content to them.
When I launch a new product, this is my sounding board. It helps me get feedback, but also see how my followers react to the post. The stats here are taken only a few hours after posting a new product. And the numbers just keep going up.
This screenshot below has numbers that are not so impressive if you just see it as such, but it was after a few hours of launching a simple quote which inspired me – and I know my followers would resonate with it, since we share the same values. Engagement is not always about showing what you can offer. It is also about building a bond, nurturing relationships.
Of course, when you are no longer selling at a lower price, you alienate some clients. People head off to cheaper competitors offering similar products. But I stand firm knowing that when I charge the right price, I bring top class service to my clients. My packaging is better, my delivery time is faster, and my products are unique, because I am able to source for the best materials to make them.
I believe in having customers who love me, nurturing that relationship, than chasing after the could-haves. I recall sending an email blast during Black Friday last year. Minutes after sending out the emails, I immediately had a sale – from a returning client. That was encouraging, because it showed I had done something right.
A few years into the business, we had to change the brand name. It was drastic and unfortunate. We shared a similar name with another company that was involved in a bad situation, so to prevent any misunderstanding, painful as it was, we had to change name.
When we announced the decision online, many clients personally messaged and emailed me to express concern and sadness. They had come to love the brand, and its name. Everyone finds it a shame we had to change that. But what was comforting was once again seeing the love we have cultivated with each follower, fan and client over the years come through.
I always knew I could not rely solely on one platform for selling my work. The moment I could diversify, I did. And I honestly feel that having my own website helps me tell a more cohesive brand story for my business. There is just more I can do, in terms of promotion, targeting and re-targeting customers. More importantly, I can charge a price that is enough for my business to operate on, and still be fair to my clients. Compared to pricing your items on a platform like Etsy or Amazon, where sellers are forced to charge lesser and give frequent discounts due to competition, this feels more sustainable.
Having my own website definitely gives a more professional look and establishes me as a legitimate entity, not just a random seller on a massive platform. There is a personal touch, and a bridge that allows me to emotionally connect with my audience. It sets the stage for all my branding and storytelling strategies.
Truth be told, it is a jungle out there. The marketplace is cut-throat. Places like Etsy are even more brutal. I understand the pressure to compete on price when it is difficult to garner business. But truly in the long term, that will only hurt your brand. Play the long game, think about sustainability. How can you push your business up the ladder of success year after year? Delve deep and mine your own brand story. Use that as a yardstick for your communications and online marketing decisions. Use it as an anchor when you engage with clients. I assure you, you will see the results, and you never have to lower your prices again.