What to Do When Your Competition Cut Their Prices

My competition lowered their prices, again.

And it slowly starts to become something to worry about. It seems that more and more companies in my industry are struggling to survive and attempt to rescue themselves with this ultimate move.

I am never happy to hear that someone else has to do this to keep his business afloat, especially that it often means going below the profit margin. But I also feel sorry for the rest of us, as we now have to find ways to avoid doing the same.

It’s always good to know what you can do to do not have to compete on price so read on to learn some of my ideas on how to achieve that.

Add More Value

One of the most common ways to beat lower price is to add more value to your offering. By doing this you will shift focus off price and further differentiate yourself from the competition.

What for? Because your prospects have to see the difference between you and any other company providing similar service or product, they must perceive you as unique but also as someone offering them incredible value. If they do, the price won’t matter anymore and it will be your competition who will be losing greatly.

I wrote about my ways to achieve this few weeks ago here, go check it out if you want to find out my marketing secrets.

Educate Your Prospects

Another great way is to constantly help your prospects understand about the service or product they are buying. People often find it easier to pick a lower price product because they can’t see the difference. Educate your prospects about what you’re offering, help them to understand the difference and make the buying decision easier for them.

There are numbers of ways to do that but these are the ones that worked really well for me:

Write a column or series of articles. You don’t even have to publish them in your trade magazine, although if you could, that’s even better. I found that writing about what we do and how it can help prospects for our local free newspaper brought quite a lot of interest to our offering.

Blog. Set up a blog dedicated to what you do aimed at your target audience and start posting regularly helpful information that makes your prospects life easier. Help them to solve their problems relating to your industry, offer advice and write as much as you can about how the service you provide can help them even more. But of course don’t turn this into a self promotion. Remember, it’s not about you, it’s all about your prospect.

Hold a free seminar or speak at an industry event. Give a talk on something that will help solve your prospects problems and make it related to what you do. Most likely you will be speaking to decision makers, people who can say yes to you which only increases your chances to make a sale not based on price.

Run free product or service demonstration. Allow your prospects to taste your services or products for free. Let them use the demo version of your product, tour your facilities to see how you deliver the service or use any other way to get them to try before they buy.

Of course, don’t provide a full service for free but delicately let your prospect to try how you do things.

Couple years ago we allowed that and it worked really well for us. Our prospects could take us for a “test drive” and that’s how we advertised it. They were able to come in and pick our brains on their project and for a small fee we would prepare some initial concepts for it. It proved to be a great way for prospects to see what we do, how we do it and make the decision if they want to work with us. And if they did, we would refund the small “test drive” fee to them.

Deliver Better Experience

The experience your prospect has with you and your company often matters more than the price. Go beyond their expectations, surprise them in a good way. Help your prospect get what they need or even discover what they need for them and deliver just that. Show them that you can help them better than anyone else and make the experience memorable.

If you do, you will be perceived as better than anyone else. And if that happens, the price won’t matter a bit anymore.

Of course, you will not always win with a higher price. Some clients simply want the lower price tag no matter the possibly reduced quality that goes with it and that’s OK. There is nothing that you can do about it and also, they are probably not the kind of prospect you would like to go after anyway.