Simplify your prices or your proposition – which strategy will work for you?

When it comes to pleasing your customers, it's easy to think that more is more – the more you do for your customers, the more they will order from you, stay with you, refer you, etc.

Your natural instinct is to provide smarter, better products and a variety of prices to accommodate your customers’ ever-changing needs.

But in a complex world, simplifying what you and your business do can actually gain you more customers and increase your sales, profits and growth, as it has for many global brands.

Think about Amazon – and how easy it is to buy from them. With one click, your product arrives the next day.

Think about Uber – you can now order a taxi, choose your car and your driver and track its arrival.

Think about IKEA – you can go into any store, choose what you want and buy it for the lowest of prices.

All of these businesses have used simplification to grow their businesses into massive successes.

There are 2 strategies for simplifying your business:  price simplification and proposition simplification. Which one will best suit your business and market sector?

Price simplification is about creating a much larger market for your value proposition.

In essence, your aim is to simplify your product or service and make it dramatically cheaper.

But how do you do this in our complex world?

It requires a fundamental shift in your thinking and, in some cases, will mean going back to the very beginning, to the time when you first developed your product, identifying all the processes along the way.

The key to successful price simplification is reducing or removing costs and unnecessary processes from your business, making the product easier to produce.

Simplicity for your business matters – you simplify your processes, operate on low margins and then pass these cost savings on to your customers in the form of price reductions.

You can then often offer just one or two prices rather than using a complicated pricing system, reducing the barriers for your customers and making it easy for them to buy from you.

Proposition simplification involves simplifying your product or service by focusing on what truly matters to your customers. If price simplification creates a mass market, then proposition simplification creates a premium market, where the price is not a major factor. In fact, if you choose to employ the proposition simplification strategy in your business, you will probably charge more.

Instead of trying to be everything to everyone, you need to identify the core value and benefits of your product and work at making it as uncomplicated as possible, as well as emotionally appealing.

You want to create a product or service that is an absolute joy to use.

Think Amazon, Google and Spotify – all great to use, simple and easy to understand.

The winner in this area, though, has to be Apple. Think of the iPhone – Apple has removed many unnecessary functions and features and made this phone so easy to use that once you are part of the iPhone family and tied into Apple Pay, iTunes, etc., you are unlikely to leave. They are also constantly working on new, faster tech, with the aim of creating something which, in Steve Jobs’ words, “looks sleek and beautiful”.