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  Have you ever felt guilty for charging what you truly deserve for your products or services? You’re not alone. Many small business owners in Nigeria experience this. Some customers believe that because you run a small business, your prices should be rock-bottom low. Others might even guilt-trip you with statements like, “I know 10 other persons who sell it cheaper? Why is it so expensive?” This pressure pushes many entrepreneurs into the dangerous price game.
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. But here’s the hard truth – you can never win the price game.

The Problem with Competing on Price

Many small business owners think lowering prices will help them attract more customers. While this might work in the short term, it’s not sustainable. Let’s look at some key reasons why competing on price alone is a bad idea:

  1. There Will Always Be Someone Cheaper

No matter how low you set your prices, there’s always someone willing to go lower. Large companies and well-funded competitors have economies of scale that allow them to sell at significantly lower prices while still making profits. But as a small business owner, cutting your prices too much can lead to losses rather than gains. Competing on price forces you to reduce your profit margin to unsustainable levels, which can ultimately lead to business failure.

  1. Low Prices Devalue Your Brand

Think about luxury brands like Apple and Mercedes-Benz. They never compete on price; instead, they position themselves as premium brands, and people are willing to pay more for the value they provide. If you constantly slash your prices, customers may perceive your business as cheap and low-quality, making it harder for you to charge higher prices in the future.

  1. Price Wars Hurt Your Profitability

The moment you engage in price competition, you put your business at risk. If you keep lowering your prices, your profit margins shrink, making it difficult to cover expenses like rent, salaries, and marketing. A business without profits cannot survive. Most small businesses in Nigeria struggle with pricing their products correctly, and many of them eventually close down because they are unable to sustain operations due to poor pricing strategies.

What to Focus on Instead of Price

Since you can’t win the price war, what should you do instead? The answer is simple: create value and market your business based on that value.
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Here’s how:

  1. Build a Unique Value Proposition

Instead of trying to be the cheapest, focus on what makes your business unique. What can you offer that others can’t? Is it quality, convenience, expertise, or a personalized experience? Customers will happily pay more if they see real value in what you provide. For example, if you sell handmade fashion accessories, emphasize their authenticity, durability, and uniqueness rather than trying to compete with mass-produced items.

  1. Offer Exceptional Customer Service

Many Nigerians are willing to pay extra for excellent customer service. Available statistics have it that 83% of customers are more likely to buy from a business that provides a great experience. So, providing personalized service, fast responses, and after-sales support can make a huge difference in customer loyalty.

  1. Educate Your Customers on Quality

Sometimes, customers resist high prices because they don’t understand the value of what they’re paying for. This is where you come in. Use your social media, website, and marketing materials to educate them on why your product or service is worth the price. You can buttress this by showing testimonials, behind-the-scenes production processes, or comparisons with low-quality alternatives.

  1. Build a Strong Brand

People buy from brands they trust and connect with. Develop a strong brand identity that reflects your values, professionalism, and consistency. The successful brands you know, like Jumia and Paystack, didn’t become successful by competing on price alone; they focused on customer satisfaction and strong branding.

  1. Leverage Word-of-Mouth and Referrals

One customer who is satisfied with your product or service can bring in five more. According to Nielsen, 92% of people trust recommendations from friends and family over any other type of advertising. Instead of lowering your base prices, offer referral discounts to your customers and encourage them to spread the word about your products and services. You will win in the long run.
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Concluding Thoughts

As a small business owner in Nigeria, you must reject the idea that low prices equal success. The price game is unwinnable because there will always be someone cheaper. Instead, focus on delivering value, providing excellent customer service, and building a strong brand. When customers see your worth, they will gladly pay for it. So, the next time someone questions your price, remind yourself: I’m not selling cheap; I’m selling quality, expertise, and experience. That’s the mindset that will keep your business growing.
Did you find this article useful? Contact us: editor@connectnigeria.com
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This article was first published on 27th March 2025 and updated on March 28th, 2025 at 2:46 pm

victor-ifegwu-mbonu

Ifegwu-Mbonu Victor is a Personal Growth and Leadership Trainer who provides training and coaching to individuals and organizations.

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