21 3 Reasons Why We Shouldn’t Compete on Price

(Episode 1 of 2 with LaVon Lewis)

21 3 Reasons Why We Shouldn’t Compete on Price

LaVon Lewis is a branding design and marketing expert. He is the co-founder, president, and creative director of Connect Branding and Marketing, an Atlanta-based award-winning branding and marketing firm. LaVon has led the creative direction for several Fortune 100 companies and thousands of small businesses, including SeaWorld, Panasonic, The Home Depot, Walmart, AT&T, Coca-Cola, and many others. His award list includes over 50 design, professional, and marketing awards. LaVon wrote the book Today is a Great Day for a WOW Image! 

In today’s episode, we’ll discuss LaVon’s entrepreneurial journey, tips from his career, and pricing and positioning in our branding, including three reasons why we shouldn’t compete on price.

LaVon’s Entrepreneurial Journey

LaVon is passionate about helping businesses and organizations visually communicate who they are. He said, “I think in the business space, it really matters. Not just things being pretty, but making sure that you set in the right tone, that you understand the customer, and then visually communicate that, whether it’s an app, website, logo, or color palette.” He has a gift for helping people be able to do that.

LaVon is originally from Tuscaloosa, Alabama. He graduated in the top five for both drawing and music in his high school, earning him dual scholarships to pay for college. He went to Alabama A&M University.

While in college, his friends, classmates, and other people in the school kept telling him that he should meet Sherrod Shackelford. Sherrod was from Chicago and had started his first business at 15. It took about a year for them to meet. After they did, they joined forces. Now, they’ve been working with each other for 21 years, enjoying what they do. They have worked on over 2,000 brands, received over 50 awards, and spoken 500 times across the country. 

LaVon considers maintaining this partnership for 21 years as one of his biggest home runs, especially because they started the business when they were only about 19. Their relationship is the best it has ever been, and they’ve stuck with each other through the big money and the small money.

Overlooking the Details

LaVon said his greatest mistake in his career was not realizing how important the details are. Sometimes in the industry, we focus too much on the big picture. LaVon had some failures from not knowing that the details are as important. “Every little thing is important. The little things make the big things. The way you do anything is the way you do everything,” LaVon said. 

If we get into bad habits with how we do the little things, it will negatively impact how we do the big things. We should pay attention to the small things so we can succeed in the big things.

Leveraging Conferences

LaVon and his business partner have a secret strategy they use to generate traffic and on-the-spot sales when they are speaking at conferences. Part of this strategy is that they’ve known each other for so long, they are in tune with each other, so they can read each other and the room easier. 

Another part of this strategy is that they come to the conference fully prepared to close on deals. Most people go to conferences thinking, “I’m going to network and get contacts, then go back to the office and follow up.” LaVon and his partner go to conferences with their contracts, assistants, or whatever else they need to close the deal right there. They do their preparation beforehand, looking at everything they could sell and condensing it down to a few options to take to the conference.

Conferences are a great way to earn credibility and convert clients, so we should be ready to leverage that. While we are there, we can connect with others, build relationships, then make deals with people while they are still feeling that connection.

Monetizing Social Media

One of the biggest tectonic shifts LaVon has seen is the monetization of social media. He knows people earning a million dollars a year from YouTube. They must monetize themselves by having a personality on camera, disciplining themselves to work, editing videos, advertising for or endorsing products, making valuable content, etc. This is something we didn’t see 10 years ago. 

Companies can also purchase ads on Facebook or Instagram. They can post content consistently and reach an audience that way, but to the customers, it is much more credible when an influencer says they use this product. People trust influencers to test and review products, and many people will watch these reviews before buying products. 

Influencer marketing is a great way to leverage their credibility. They can promote our products or services and give an honest opinion about them, which can lead their viewers to purchase from us.

Knowing Why and Who

When LaVon sits down with a client to consult them on branding, the first thing he asks is, why? Why are they doing what they’re doing? Why are they here? Why do they think they’re different from their competitors?

Once they answer those questions, LaVon looks into the profile of their customers. He wants to know how they think, how to attract them, and how to communicate with them. For example, LaVon does a lot with color psychology. Black, gold, and silver attract a more affluent audience so brands like Apple, Mercedes, and Lexus use those colors to appeal to that kind of audience.

These two things—why and who—are the building blocks for the whole brand. When we focus on these things, we don’t have to think as much about the price or negotiation because we are focusing on the value. 

Positioning and Pricing

Brand positioning is knowing and communicating the difference between our brand and a competitor. It is showing our audience how we aren’t the same as other companies in our space.

For example, LaVon told me about a grocery store in Atlanta called Publix. Their slogan is “Where Shopping is a Pleasure.” That’s their position and promise to the market, and they are very clear about that. They don’t compete with Walmart’s prices or hours, and they don’t have as many stores like Walmart. They compete with making shopping a pleasure. They do have higher prices, but the store is always clean, the employees are friendly, providing great customer service, and the quality of the groceries is great. 

Because they understand their position, they don’t compete with the wrong people and they don’t communicate the wrong way to their customers. They deliver on what they say. We shouldn’t compete on price; we should find something more meaningful and build our brand and our competitive advantage around that.

“Branding is about communicating value. That’s the simplest way to explain it. It’s, ‘How well do I communicate my value to the customer?’ And you do that in a lot of ways: messaging, color, logo, web—it’s all about value. If you do that successfully, it’s less about price,” LaVon said.

3 Reasons We Shouldn’t Compete on Price 

When we compete_Blog

The first reason we shouldn’t compete on price is it can ruin our position. If we’re Mercedes and we negotiate from $100,000 down to $90,000 or $80,000 for a car, it goes against the status that we’ve set up and what the company represents.

The second reason is more of a financial one. If it costs Mercedes $60,000 to build a car and they sell it for $100,000, that gives them $40,000 to work with, which a portion of goes to employees, marketing, and things of that nature. Lowering our prices can radically decrease the profitability of our organization.

Apple does a great job with this. It only costs them about 20-30% of what they’re charging to make their products. They can sell a phone for $1,000, but it only cost them $200 to make it. LaVon said, “That $800 difference is clear branding and positioning because they’re selling a lifestyle, they’re not selling a phone. They understand the vision. That’s what you can do when you communicate your value and positioning. You can have a profit margin of that sort. My business partner says, all the time, that pricing is the term for how bad you can make somebody want it.

The last reason not to compete on price is that by decreasing our profit margin, we decrease what we’re able to do for our audience. We’re not able to innovate, we’re not able to market well, and we’re not able to provide great customer service. When we cut into our profit margin like that, we have to cut into the quality. When we compete on price, we cannot compete on quality.

Everything with Apple is first class because they can afford to hire the best people who have the best training, buy the best products to make the best product, and still have money in the bank.

Pricing is the_Blog

Waffle House

One unexpected example of great branding LaVon shared is Waffle House. We wouldn’t necessarily think of them as a great brand. Their colors are black and gold which feel cheap, though yellow stimulates hunger. Inside their restaurants it’s small, cold, there’s no WiFi, the chairs aren’t comfortable, and they give you the check before you even get your food. 

But all of this is on purpose because if a customer stays in their seat for longer than 17 minutes, they start to lose money. They know who they are as a brand. They know people come to them when they want food quickly, and they’ve leveraged that. They can make more money serving a new customer every 17 minutes than if they made their seats comfortable, gave their customers WiFi, and let them take their time.

Key Takeaways

Thank you so much LaVon for sharing your stories and insights with us today. Here are some of my key takeaways from this episode:

1. If we get into bad habits with how we do the little things, it will negatively impact how we do the big things.

2. Conferences are a great way to earn credibility and convert clients.

3. Attend conferences fully prepared to close deals. 

4. Before we start our branding, we must know why we are doing what we’re doing and who we’re doing it for.

5. Lowering our prices can radically decrease the profitability of our organization.

6. Don’t compete on price. Competing on price can ruin our position, radically decrease the profitability of our organization, and decrease what we’re able to do for our audience. When we compete on price we cannot compete on value. 

Connect with LaVon

To learn more about or connect with LaVon:

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    About the author

    Nathan Gwilliam

    Nathan Gwilliam

    I help organizations navigate tectonic shifts that are transforming the business landscape, so they can optimize marketing, accelerate profits, and make a greater difference for good.

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