If you’re positioning what you sell based upon having the lowest prices, you could definitely be playing a no-win game. Do you really want to be known as the cheap company? Even if that moniker wouldn’t bother you (assuming you can still make a profit), it’s likely that selling on price alone will lead to a downward profit spiral. Promoting low, low, low prices suggest you’re commoditizing your offerings. And, companies who sell me-too items have to concentrate on one thing: continually trying to figure out how to manufacture for less, stock for less, ship for less, sell for less, service for less-or perhaps even become service-less. And—the worst of all—exist on less.

Commodities don’t just include obvious items like copying paper-products that are often difficult for the untrained eye to distinguish from each other. Think of the last time you bought a MP3 player. Did you decide on the brand and model you wanted—and then search the Web for the cheapest place to get it?

You didn’t care if the selected dealer was local, if they could offer personal advice or on-site training, or if you could easily bring your MP3 player back there for possible repairs. Meanwhile, your local shop carried the same model, but their price was perhaps 5% higher. They lost the sale.

Now, what if you’re not selling on the lowest price? You’re merely offering occasional price promotions? Exercise great caution, or you may discover you’re merely deluding yourself.

If you deeply discount popular items, your customers may only be your customers long enough to gobble up your loss-leaders. For instance, while supermarkets run price specials each week, they use these as lures to get shoppers into stores. If a customer buys a few items at wholesale cost (or even below), they’re expected to buy lots and lots more at regular prices. Shoppers who walk into the store with carefully made lists of that week’s on-sale specials—and only buy what’s on their list—are the grocer’s nightmare.

If you run promotional specials every week (or month), you may also end up driving your brand value through the floor. But, if you’re in an industry where promotions are more the norm than the exception, how do you escape from turning your entire company into a loss-leader?

First, realize that sales do not equal profits. Be willing to trade off increased sales for increased profits. With that mindset, you can now concentrate on giving your customers more reasons to purchase from you than price. There are other things that can be more meaningful to your customers, just as long as you truly understand your customer base and you can deliver what they think is important-at a fair price.

Can you offer more astute advice? Hours of operation that are more convenient? Sales force continuity? Faster quotations? Can you ship more quickly? Make fewer mistakes? How about emphasizing something really important-like doing a better job and promoting that?

Think value, not price. And promote that. Your customers will learn to value your company, not your prices.