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It’s about what it does, not what it costs

You can’t win when you compete on price. Someone else can always make it cheaper. Even if you can keep up, you’ll make less and less on every sale.

You win when you compete on features. People buy because you give them something that helps them — helps them do a job, feel good, have fun, or solve a problem.

People pay for features. Solve an expensive problem — people will give you more money. Solve a recurring problem — people will give you money again and again.

What can you offer that competes on features instead of price?

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Comments

  1. Eyal Rosen September 23, 2009 at 11:31 am #

    Hi Andy,

    I love this post, and I couldn’t agree with it more.
    We are in the competitive coffee business, and making money without providing extra value is practically impossible.

    The feature that works for us is “freshness”. Many coffee-lovers will pay extra to get freshly roasted coffee from award winning roasters.
    Especially if it’s shipped to their door! Compare this to the months-old coffee that they find in coffee chains and supermarkets…

    It’s a win-win for everyone, and it allows us to focus on increasing value, rather than price reductions.

    Eyal

  2. Pat Moore September 24, 2009 at 3:35 am #

    Respectfully – I disagree. Compete on *experience*. We are building a product that has less “features” than our competition but enables our customers to not have to learn those “features” and as a result offers a better experience for them.

    Our first product is a webpage assistant that allows people to edit content, but not layout. The result? Low-level people can be allowed to edit the web content because they can’t screwing up the layout.

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