t Puts Your Future at Risk

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Another negative effect a price war has is on your overall brand image . The image you create through your branding efforts is one of the ultimate signs of profitability in a company. It’s how you know you’ve “made it.”

So when you ask your customers what word they associate with your brand, the last thing you want to hear is “cheap.”

But if a low price is the only way to convince your clients to work with you, then that's probably why they even talk to you. They're around because you're cheap.

It's a fact that there will always be people who wantcanada phone number data something cheap . Part of doing business is making deals and trying to get a better price, and everyone has their end goal to consider. But you have an end goal too.

However, being cheap and being good do not usually go hand in hand. You don't have to look far to find the popular Venn diagram that exposes the true nature of good, fast and cheap.

Brand image
Brand Image (Image Source: InReach Solutions LLC )
Simply put, you can't have everything you want in a race to the bottom. If you're going to try to produce a cheap product, you're going to have to sacrifice something. And when you start compromising like that, it won't be long before they notice the drop in quality.

And many studies have tried to prove this fact. A 2014 study that was published by the National Bureau of Economic Research seemed to show a causal link between price competition and overall service quality. That is, when prices were competitive in retail stores, the overall service of the store was reduced to previous levels.

Another study showed that price has an inverse influence on consumer perception of value. If the price is too low, the product is cheap. If the price is too high, the product is a rip-off.