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Common Questions and Answers
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.
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.
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