There’s nothing worse than getting caught in a price war with other businesses. Often your competitors can keep their overheard lower and undercut you on price. Here are a few tops tips from my retail days to help you fight the battle:
Do a competitive review
If you feel you are always competing on price, check this is actually the case. Make a list of the 10 people you class as competitors, find a product or service you all stock (or similar as possible) and review what you are all charging. You might find that competitors who give the perception of low prices do so because they have a loss leading product they promote that they either break even on or lose money on but it gives people the perception that all their prices are low.
Upgrade and upsell
To ensure repeat business, offer free or discounted upgrades or upsell additional items at a discount. By taking a higher percentage of a customer’s spend (even if it is via a discount or promotion) you are increasing the basket value they spend with you. It is normally easier to make more money from an existing client than it is to attract a new client so get as higher share of their spend as possible.
If there is one product or service you sell a lot of but make no money on, what can you combine with it to improve your margins? If you are an online marketing business and make lots of money on SEO services but less on PPC services, combine the two and sell them as a complete service to a customer. If you sell printers, consider also offer a one year printer service as part of your offer or a discount on future toner cartridges.
Spread your wings
If you are constantly competing on price with the business down the road, then advertise in the neighbouring town and draw new business to you that will be unaware of your competitor. Or look to sell your products and services online where you can carve out your own niche.
If you are finding yourself getting caught in the situation where the only thing that makes you different from your competitors is price, then do something to make yourself stand out. Don’t just make it about price. Offer unique services or products that change the perceived value of your offering.
Be the best
People expect to pay more for the best in the business so make sure that is how you are perceived. If you clean windows, make sure you do it better than anyone else in the area. If you build websites, make every website worthy of your show reel. Be the best you can be with everything you do and tell others about it. Get references, ask for referrals and make sure every client sings your praises.