How mediocrity kills your business!

Many people strive for normality. Just don’t fall out of line. After all, this attitude holds less potential for conflict and is the supposedly easier way. However, this attitude is deadly for your freelance work. If you align your prices and your quality with the standard, you will be lost in the masses. As a result, your profile is low and you are hardly noticed as a freelancer. You have to decide on a strategy. How to do this is explained in this article.

You have to decide!

At first glance, the decision is quite simple. There are actually only two options. Either you are quality leader or price leader.

Quality Leadership

Do you have the ambition to offer the best service on the market? Do you compare yourself with your competitors who currently offer the highest quality? Your goal should be to clearly distinguish yourself from your competitors in terms of quality. Then it will be much easier for you to charge higher prices. Due to the high quality of your services and products, customers will be willing to pay the price. Examples of quality leaders: Apple, Porsche, Ferrero …

Price leadership

If you want to reach a lot of price-conscious customers quickly with a favourable offer, quality is of secondary importance. You have to compare yourself with the competitors who offer your products and services at the best price and undercut this price. The quality should still be acceptable. Customers in the low-price segment usually do not expect the highest quality. Examples of price leaders: Kik, Hyundai, Hama

assets and drawbacks

Both variants have advantages and disadvantages. Quality leadership offers high margins compared to price leadership. With quality leadership, however, there is a risk that you will be dependent on a few large customers due to the narrower target group. Especially price-conscious customers are usually not very loyal. This means that as soon as a competitor is cheaper, your (ex) customer buys from the competition. Separate yourself from customers who demand high quality but have a poor payment record. You can find out how this works in the article: Customer portfolio analysis: When customers become “poor dogs”.

To give you an overview, you will find a small table below showing the advantages and disadvantages of both strategies:

Quality LeadershipPrice leadership
higher margins solvent clients better customer loyalty Social entrepreneurship can be realized more easilyLarge customer base can be built up more easily low dependence on a few large customers (diversification) Market launch may be easier due to the favourable pricing policy

Conclusion

Although both strategies have their drawbacks, I strongly recommend that you choose one. Perhaps the path to price leadership seems easier at first glance, but this is not the case. You have to make smart decisions and reach a high number of customers quickly in order to maintain your price leadership through volume discounts. To emphasize the importance of defining your strategy, you should keep the following in mind:

Those who are cheap and offer little performance are discounters.
Who is expensive and provides good performance is a luxury label.
Who is expensive and provides little service is a fraud.
Who is cheap and provides good service is an idiot.

I hope this article helps you to position yourself.  I would like to know if you are a quality leader or a price leader and why. Write in the comment fields below this article!

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