Low Price: "Race to the bottom"
I have learnt over the years that even if low pricing gets me more customers It doesn't guarantee profit making.
Let me explain:
If I charge 50,000naira for a job with a profit of 1000naira....
Because it is cheap I am likely to get 10clients, and make a total of 10,000naira profit.
Now serving 10 clients will put me under tremendous pressure and I won't be able to hire assistants since my profit margin is very low.
Most times I am worn out and not able to satisfy all my customers.
So I decided I rather charge one customer 60,000 and make all the profit from that premium customer, that way I can deliver premium service.
And yes it has worked for me.
I understand that people who are into buying and selling can do low profit margin since they sell to the masses, but for a service oriented business like mine, low pricing leads to zero profit, which in turn leads to bankruptcy(RACE TO THE BOTTOM).
Let me know what works for you.