by Clare Appleyard, founder of Katannuta Diamonds

[This blog post comes with a disclaimer: the topic wasn’t my idea. Instead, it was inspired by a post by our good friend and Katannuta Diamonds Co-Lab partner Vicki Bain, of Chocoloza.]

Over the last few years, Black Friday sales fever has grown in popularity in South Africa. Suddenly, an American marketing ritual has become de rigueur to the extent that people will queue from midnight at local stores, just to grab a bargain.

However, as a small business, it’s hard to offer the kind of discounts that people have come to expect on Black Friday. Often our margins are exceptionally small to start with, and by participating in something like Black Friday, we run the very real risk of losing money.

An Instagram post by Chocoloza summed up our feelings on this matter beautifully, and as soon as I read it, it struck a chord with me (summarised version below, full version here):

“Because you consciously choose quality over quantity every time you buy from us. Because you support 16 families every time you choose Chocoloza. Because we support other like-minded, local business when we choose our own suppliers, and in this way try to support the local economy - creating growth where we need it most in our beautiful country. Because we are not trying to be the cheapest – we are trying to be the best. We don’t mass import from overseas, we craft and create locally. We can’t afford to slash our prices, and if we did the price would be paid by the very people you choose to support.
We know you don’t buy from us because we are cheap. We know you buy from us because you love what we create and how we create it, and who we create it with. And we love our loyal customers that come back time after time and pay a premium price for a premium product. So, thank you for believing in quality over quantity.”

What was the key line?

“We are not trying to be the cheapest – we are trying to be the best”

The wisdom in this line is perhaps the most profound you’ll read this year. A big challenge for entrepreneurs is believing in your own worth and knowing that you and your product are worth the price that you’re asking. In times of economic shrinkage, it’s tempting to drop your prices to try and undercut a competitor. If you’re the cheapest, you’ll get more support from customers, right? Wrong!

You cannot build a successful business built on price point alone. If the sole reason people are willing to buy from you is because you have the lowest price, you will go out of business sooner rather than later. There will always, always be somebody who is willing to cut profits or take a loss, just to make a sale.

You have to give customers another reason (preferably a few reasons) to buy from you, outside of your price point.

Do you offer an exceptional service? Outstanding quality? Knowledge and expertise that clients can’t get anywhere else?

These are all justifications for not lowering your price, for not aiming for the bottom end of the market. Offer a premium service or product at a premium price, and the right people will willingly pay for it.

A real challenge with always trying to be the cheapest is that people will often go “Why is it cheap? What’s wrong with [insert your product/service here]?”.

Consider a time when you’ve obtained three quotes for something (be it carpet cleaning, a service on your car, or a repair to something).

Chances are that you eliminated the cheapest quote (“What if he’s not using genuine parts?”) and the most expensive quote (“That’s too expensive”), ultimately settling on the safe, middle ground quote (“It seems fair”). This probably wasn’t even a conscious decision on your part, your brain defaulted to that decision (known as heuristics).

Don’t lose business based on our built-in brain shortcuts. Invest in becoming the best in your industry. Offer the extras that nobody else does. Be the expert that people want to buy from. Focus on quality and not quantity. Price yourself fairly but know your value.

And above all, support other businesses that do the same.

Clare Appleyard is the co-founder of Katannuta Diamonds, a bespoke jewellery manufacture company based in Johannesburg, South Africa. Formed in 2007, Katannuta Diamonds has established itself as one of South Africa’s leading independent jewellers, with a strong reputation for excellent service, quality workmanship and competitive prices. Graduating from UCT with a Master’s degree in geology, Clare gained valuable diamond experience working for global giant De Beers, before expanding and developing her interest, knowledge and skills into the world of polished diamonds and gemstones. Passionate about diamonds, gems and consumer education, Clare is building a strong, proudly South African brand and is committed to helping fellow female entrepreneurs do the same.
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