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Help! My Competitors are Low Balling Their Price...

posted 16 Nov 2010, 10:35 by Sam Mbale

In the constant battle for customers coupled with a bad
economy, is it any wonder that some of your competition is
engaging in a price war?  After all of your hard work,
experience and service you offer, you are now forced to
reduce your prices simply because your competition is
offering rock bottom pricing?  Hogwash!


One of the most frequent questions I receive from my
subscribers is how to deal with low priced competitors who
are trying to steal clients away and my answer is always the
same.  Don't let your competition dictate your value and
commoditize your offering.  If you have built a business
based upon my BLAST methodology - you have built your
business on the concept of offering the best customer
experience for the best value.

It is important to know that in this economy, many
businesses are struggling and can only compete on price
since they are not really creating value for their
customers. You need to understand the business model you
want to create and continue to evolve that strategy over and
over again to keep your position in the market and more
importantly, your customers.

If your business model is to become the low price leader
(think of Walmart and BJ's), then you need to focus on
efficiencies that allow you to lower your costs and
therefore your price. This requires a lot of attention on
process improvement, automation and better buying of your
raw materials.  To truly stand apart, you also want to focus
on creating tremendous value for your customer in other ways,
faster check out, bonus gifts, greater convenience and
loyalty programs to name a few.

Here are some tips to stand out from your competition and
stay away from the price war:

Know your customer.

By knowing your customer you are able to design programs and
solutions specific to their wants and needs.  You are able to
bring new ideas to the market and create experiences that are
handed down for generations.

Strive to be different.

If you don't offer something more than your competition that
creates value for your customer, you will be viewed as a
commodity and the only thing that makes you different is
price.  Understanding your competition is just as equally
important as understanding your customer so you can clearly
communicate those differences and the real value you are
offering.

Dollarize your value. The world today is filled with much
ambiguity and fluff. Make it easy for your customers to do
business with you by demonstrating the real economic value
of your offering.  Rather than say "saves you time",  -
calculate how much time is saved. If you offer bonuses, what
are they worth?  Customer's perceive value if they are
getting more for the price they are paying.  Show them how
they are getting more with you.

Sweat the small stuff.

Make it a mission to create the best experience for your
customers.  The simple actions go a long way:  a welcome, a
smile, a thank you.  Customer service is a dying theme and
simply by treating people like royalty, may push you to the
front of the competition line. Deliver what you say you will
deliver and follow up with your customers often.

Your product becomes a commodity when it doesn't appear to
be different than everyone else.  At that point, you will
enter into a price war.  By differentiation, real value and
a strong experience that creates memories, you will be able
to not only charge a premium, but justify it over and over
again.

About the Author:

Kellie D'Andrea is a leader in business transformation and
the creator of The BLAST Program. Her customers learn
branding, leadership and selling techniques that build
customer loyalty and long term profits. Download your free
whitepaper 23 Mistakes Business Owners Make at
http://www.kelliedandrea.com

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