Commodity pricing: When you are selling improvement, you are selling against dozens or hundreds of other improvement offers out there. You are stuck in the middle of a very red ocean, competing with everyone else who is selling similar options. This competition turns what you do into a commodity and pushes the pricing down. It quickly becomes a race to the bottom in terms of pricing.
Dan Kennedy once told me, "If you can't be the number one lowest-price leader in your market, there is no strategic advantage of being the second lowest price leader in town, but there is a huge strategic advantage of being the most expensive." In other words, if you can't be the cheapest, then you need to become the most expensive. And you can't do that when you are fighting inside this red ocean. When you present a new opportunity, you are creating a blue ocean, and all price resistance goes out the window.
Dan Kennedy once told me, "If you can't be the number one lowest-price leader in your market, there is no strategic advantage of being the second lowest price leader in town, but there is a huge strategic advantage of being the most expensive." In other words, if you can't be the cheapest, then you need to become the most expensive. And you can't do that when you are fighting inside this red ocean. When you present a new opportunity, you are creating a blue ocean, and all price resistance goes out the window.