Do your customers really value you?

“We supplied an office of around 100 people with a daily fresh fruit delivery for the last 7 years. A new Office Manager came in and shook things up a little. She tried to negotiate a discount which, as a quality merchant, I refused to do.  She switched to a competitor because they were cheaper. Shortly after, I received an email asking us to supply them again. She received so many complaints about the poor quality of the fruit and the late deliveries that they wanted us back.”

This is a LinkedIn post from Neil Bharadwa, the owner of The Cambridge Fruit Company (which incidentally, got 1229 likes and 77 comments in under 2 weeks).

Those of you who have read New Business: Next Steps will recognise Neil from the case studies.

I wanted to share Neil’s post because it raises quite a few questions:

Do you believe you’re worth the price you charge?

I get regular, anguished, questions about pricing from people who clearly don’t believe in the value of what they’re providing.

It’s great to see Neil’s unhesitating assurance that there’s no way he’d give a discount.

He rightly believes that he’s providing great value.

Do you?

Would you walk away from a deal?

Discounting only works if the business model is set up for high volume and low margins.

For most small businesses discounting can be disastrous as they simply can’t increase the volume of sales enough to make up what they lose on each transaction.

It’s better to walk away and work with people who appreciate your value.

Would you?

Building trust

I was astonished by the number of comments on Neil’s post that suggested he should have put his prices up when he started re-supplying this client.

He was adamant that that is not how he treats his customers.

They were perfectly entitled to shop around for the best deal and he was perfectly entitled to refuse to discount.

To slap them with a price increase when they come back is not the way to build trust and a long term relationship.

Faced with this situation, what would you do?

If you need help with pricing or any other aspect of growing your business and making it more profitable, just let me know!