"Competition is for losers" – Peter Thiel
I love studying strategy and competition.
I have learned that it is rarely a good idea to compete for the lowest price.
Imagine you have a product or service and your only advantage is that you are cheaper than the competition.
What if you have the lowest price but a competitor has a lower price than you can set?
What if you sell yoga mats and Amazon releases their version or your supplier decides to sell the products themselves?
There is no advantage in being the second cheapest on the market. Being too cheap can also affect conversion rates because the product is associated with poor quality.
Being the cheapest works if you have the volume to support it like IKEA or McDonald’s.
It is much, much better for most companies to assert themselves value. Value means increasing the benefits of your products for your customers.
Offering more value means that customers are willing to pay a higher price. If you ask for more, you will have more margins if you try to win a customer.
Nowadays there are no big differences in the area of e-commerce. Most nutritional supplements and beauty products come from the same factories. Most physical products come from the same factories in China.
You can somehow Distinguish yourself by pretty packaging or add a logo to the product.
However, there is a way to add significant value to your product that not many people use.
You can do this by turning your product into an offer.
In this way, you increase your conversion rates, offer your customers more value and are more profitable overall. And the best thing about it? It is not very expensive.
Note: Hat tip to Russell Brunson for the elaboration of this concept.
What is the difference between a product and an offer?
A product is a single article.
An offer is a product plus additional elements that create value.
Here is an example.
You buy a brand new BMW 3 Series.
To keep it simple, we assume that the cars are exactly the same.
If two dealerships offer the same BMW, your decision comes down to the price, the dealership's ratings, and possibly your relationship with the sellers.
What if a car dealership added value by turning it into an offer? What if they added additional items that didn't cost much?
If everything else is the same, which retailer will you buy it from?
It's a win for the customer because he gets more for his money with free car washes and maintenance.
It's a win for the dealership because they got the sale. You not only benefit immediately, but also get your foot in the door for future sales.
This is an example from real life.
But how does this apply in the world of e-commerce?
Sarah is interested in buying protein powder. She specifically wants to buy those designed for women
She does a few searches and has narrowed it down to two options: Fitmiss or Ladyboss.
Let's take a look at the Fitmiss offer.
It is a direct purchase. 2 pounds of protein for $ 27.99.
The vast majority of e-commerce transactions are processed in this way.
Now let's see what LadyBoss offers.
When Sarah makes a direct comparison, she compares the ratings and ingredients to determine which protein is better.
But wait … it is NOT a direct comparison.
LadyBoss made an offer.
Sarah could go with FitMiss and get the protein.
Or, with LadyBoss, Sarah could get the protein + recipe book + 28-day challenge access + training plan eBook + Facebook group access + free shipping.
What offer helps Sarah to better solve her problem? Boss.
It is no longer a fair comparison. FitMiss only offers protein, while The LadyBoss Protein plus offers a ton of free goodies.
Turning something into an offer means:
- Higher conversion rates.
- You can charge a higher price.
- Higher customer satisfaction because you solve the problem better.
- You will start building a tribe.
- You no longer compete directly against other people.
Does it make sense?
Your biggest competition is no other marketer. Your biggest competition will be Amazon.
People like to compare shops and there is a possibility that they can find a similar product on Amazon for half the price.
But if you turn your product into an offer, It is no longer a direct comparison. You can charge whatever you want.
Simple ideas for adding value
First of all, I would not start a campaign with the existing added value.
Your goal is to test first whether the product is profitable or not. Only when it turns out to be profitable should you invest your time and money in creating added value.
You want to keep everything as cheap and simple as possible in the beginning.
If you make more profit, you can invest in greater value again.
Some cheap and simple ideas are:
1. A cheap, physical product.
Let's say you sell one of these tea slimming products that Instagram models like to advertise.
What is a cheap item you can add that would help them?
I searched for Aliexpress and found a teapot. It is useful and looks valuable. It is also cheap for you and easy to ship.
Now our tea product has this added value: Our Bad Bitch Star Tea Infuser (value: $ 15)
It will cost me $ 1 to include this, but can add a ton to the value.
2. An eBook or a travel guide
What information or knowledge can help my client solve his pain point? You can convert this information into an eBook or a guide.
Remember that design and presentation are important.
Check out these two companies, both of which offer free travel guides.
The first looks like a disposable eBook.
It is only an added value if the customer wants it.
The second has a much better design and presentation. It rightly feels like an eBook that could be sold on Amazon.
Creating an eBook is easier than you think.
- Content: You can write it yourself, commission someone to write it, or find free content using PLR (Private Label Rights) articles.
- Design: Hire a specialist. If I want something good, I go to Fiverr. If I want something epic, I find a specialist at UpWork.
People love things that they can print out.
- cheat sheet
They don't cost much, but they help the customer reach his goals faster.
Put everything together
Suppose you want a pore cleaning device.
I have seen that these are sold all over Facebook these days.
Most entrepreneurs would probably buy it for $ 9 and sell it for $ 30. It may work, but margins will narrow with paid traffic.
Let's make an offer out of this product.
How can we help the customer get rid of their blackhead problems?
1. A cheap physical product
I found a blackhead extraction tool for around $ 0.50
2. eBook – The Clear Skin Diet
What the customer really wants is clear skin. What else can help you? How about an eBook that gives you nutritional tips on how to clear skin?
The content + design is probably $ 100.
3. The daily cheat sheet for clear skin
What if we created a PDF that gives someone a daily checklist on clear skin habits?
Wash your face, change your pillow case once a week, use this device twice a day, etc.
You can either:
1. Increase your price.
2. Keep the price the same and get a higher conversion rate.
3. Do both 😈
Does it make sense?
Traffic costs will continue to rise.
If you can't cut your costs, focus on increasing your value.
Now is a good time to start implementing this tactic, as not many others do.
Keep implementation simple.
When someone orders something from you, you automatically send an email with "Here & # 39; s Your Free Goodies".
Bam. The e-mail refers directly to the e-books. No login bullshit.
Here's another idea.
Instead of creating a stack of values at the front end, you can offer bonuses when the customer performs a specific action.
The classic is free shipping when you order $ 50 or more.
If you order $ 50 or more, you will receive a free item.
Here is TigerFitness’s reward program
How to compete
Online marketing will become more competitive over time.
Traffic costs will rise.
The entry barriers have never been lower for anyone.
How can you survive in an increasingly competitive world?
It's simple: offer the customer more value.
Solve your problems better than your competitor.
A strong value proposition is more powerful than the best marketing aspects.
Photo of Andrea Piacquadio from Pexels.