Startups flooding your market with cheap offers could be your biggest opportunity
TL;DR in 7 minutes I'll share the how and why of premium positioning.
Hi, it's me again :)
Thank you for opening this email. I'm Desirée, research analyst with 20+ years in marketing. I lead Babelfish, helping tech founders transform their messaging from complex to easy to sell.
<- This is me recovering from a flu with killer-clown skills. It was un fun.
This week's truth bomb: the premium paradox
Something fascinating keeps emerging in my conversations with tech founders lately. It's a reality that honestly breaks my heart a bit, because I see brilliant companies struggling unnecessarily... They're trying to compete with 'cheap' players while offering premium solutions. It's like bringing a gourmet meal to a fast-food fight - you're playing entirely the wrong game!
These companies typically share three powerful characteristics (and trust me, I've interviewed enough of them to spot the pattern from a mile away):
An insanely strong and loyal customer base (once in, they typically don't leave - it's like Hotel California, but in a good way)
A highly developed and optimised solution and service level (the extra mile isn't extra, it's just where they live)
A deep passion for a specific approach (with enough success stories to fill a Netflix series)
The bigger picture: what's happening in the market
This shift in market dynamics isn't unique to tech. We're seeing it across the entire B2B landscape, from cybersecurity to HR tech. And here's where it gets juicy: while venture-backed companies flood markets with free or cheap solutions, they're actually creating an unprecedented opportunity for premium providers.
One founder's story particularly struck me. His sports tech company has spent 15 years perfecting the onboarding, service offering and systems for professional sports clubs.
Recently, venture-backed competitors with megalodon (ask my kids, it's a thing) marketing budgets are flooding the market, literally giving away hardware to capture market share.
This sucks, because in his words:
‘We can't install systems for free - I'd destroy our cash flow,’ he explained. ‘These companies package everything so well. It all looks fancy and polished. It’s affordable. But at the same time, buyers are actually selling their data’.
The hidden pattern (and the good news)
Plot twist: These founders aren't actually struggling with a pricing problem. They're fighting a value perception battle.
And that's actually fantastic news, because while you can't always control market prices, you can absolutely transform how your value is perceived. (That might be the most important line of this whole newsletter)
Think about buying coffee. There's a reason why some people consistently choose a €5.50 craft coffee over a €2 quick fix. They're not just buying coffee - they're investing in quality, expertise, and an experience. The same principle applies in tech, just with higher stakes and longer-term implications. And usually without the caffeine jitters.
Where this is heading
What I'm seeing on the horizon is even more fascinating: As markets get flooded with 'free' or cheap solutions, a clear divide is emerging. This divide isn't just about pricing - it's about fundamental business philosophy.
On one side, we have:
Venture-backed companies offering 'free' or cheap solutions
Quick-win focused implementations
Data monetisation business models
Short-term market share grabs
On the other side, we see:
Long-term partnership focused providers
Deep expertise and customisation
True data ownership and privacy
Sustainable business models
Here's what makes this so interesting: While the market appears to be moving toward 'free', we're actually seeing a parallel trend where companies are becoming more aware of the hidden costs of these solutions. They're starting to ask harder questions:
What happens to our data?
Who really owns our implementation?
What are the long-term dependencies?
How sustainable is this business model?
This is precisely where premium providers call the shots. The 'race to the bottom' in pricing is actually creating a 'race to the top' in value delivery.
Your current clients already understand this - they chose long-term value over short-term savings.
Their loyalty isn't just about your product or service. It's about your entire approach to solving their problems. When you truly understand
This is what that looks like in practice
My brilliant friends over at Secwatch were stuck in this exact situation. Premium solution, premium price, premium headache trying to compete with the cheaper cowboys that were flooding their market. Through our research, we completely transformed their approach. The result? Ad performance soared (+12%), business value jumped (+50% according to their accountant), and they stopped delivering a service that was high-cost, low-ROI. And here's the best part - they have now packaged their premium partnership to a subscription model that brings in monthly revenue.
We simply discovered their clients weren’t buying cybersecurity - they were buying peace of mind and partnership. We repackaged their services to reflect the little truths in how far and wide their partnership went. Once we repositioned around that, price became secondary.
Turning insight into action: your next steps
How can you apply this wisdom right now?
Find your own terms to compete with Your premium pricing isn't the problem. Your strategic narrative is. When you properly articulate the long-term value of your solution, price objections naturally dissolve because you understand exactly WHO to market to and WHAT they need.
Flip the script on marketing Instead of following playbooks and cookie-cutter strategies, look at your target audience. What is their position when they need a solution like yours? Where do they stand both demographically and in terms of worries, pains, symptoms? Which competitors do they consider and why? How do they look for a solution?
Align marketing and sales Not everyone will understand or appreciate premium value. That's okay, there’s market for everyone. You focus your energy on prospects who recognise the strings that come from quick wins. Build relationships and make sure to infuse your marketing with what you learn in the sales cycle and vice versa.
Truth Bombs from my own trenches - what I’m learning
Speaking of pricing and value, I've been deep in the process of evolving my own service offerings. And by 'deep in the process' I mean questioning my own truths as always and consciously looking for patterns in sales conversations. Aligning sales, marketing and delivery is starting to really pay off in terms of strategic decision making and optimising.
What's fascinating is how customer research consistently reveals that clients value the strategic clarity we provide far more than the tactical deliverables. One client, a very niche and nerdy software company (my favorite kind!), received a standing ovation from their board of advisors. Yes, an actual standing ovation. For a positioning strategy. These are the kinds of feedback that make me weak in the knees.
This insight leads me to restructure my FeedbackFuel service, focusing more explicitly on the strategic transformation it enables rather than just the research deliverables.
If you’re ready to work with me
Here's how I can help you:
Wisdom Workshop: In 90 minutes, uncover what's actually blocking your growth and get actionable recommendations from an independent nerd with 20 years of experience.
FeedbackFuel: Get the exact words and highly strategic and tactical insights that help you nail your messaging and get you deals.
Curious if this could work for you? Happy to chat: https://savvycal.com/desireekolman/connect