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The Right Way to Compete on Price

Posted On - 21/01/2014 13:40:51

Price Competition: Know Your Enemy
Our last workshop blog set out the rules of price. And whilst it's important to know them, knowledge won't win you the game. For that you have to play. That's what this video is all about.
In the video we capture the essence of price competition in three phrases:

  1. Know your enemy
  2. Pick your battles
  3. Go on the offensive

The video makes it plain your enemy is customer perceptions. The issue you have to tackle is whether they think you're prices are fair or not. The start point is to be certain, not think, be certain your prices are.

Mystery shopping - the secret to confident price settingOnly then can you set and talk about your prices with genuine conviction. But what's fair is about more than numbers on tags, it's about how good you are in comparison. And you can only make that assessment if you mystery shop them.

You won't win business just knowing your prices are fair: to compete you have to use that fact. The shrewd are always careful where they place their bets and price competition is no different. In the video we talk about ‘picking your battles'.

Picking your battles means you have to decide what you will compete over and what you won't. In other words you have to know where it makes sense to go head-to-head on price and where it's better to reframe what the competition is over.

The video points this out in detail and gives special advice on product bundling – the means to defend yourself against aggressive price competition.

When price competition is tough, change the game and dictate new terms for comparisonThe video also talks about ‘going on the offensive'. This is more than just words to encourage you to act, this is about the way you approach the whole thing. Because you need to be assertive, conspicuous and feisty. The question is why?

Our price and shopper research proves customers assume you're worse value than you are. It's a result of their assumptions over buying power and how the big chains brainwash them through broadcast price led promotions.

So just merely informing them about your products and services won't have much impact. Unless prospects can - are made to - compare you, their assumptions will get in the way. Because they believe the big chains are better - whether they truly are or not.

To get customers to register and take enough notice to want to enquire, you have to help them make the comparison.

You have to use your marketing to jolt them into judging you.

So your promotions have to be direct and assertive.

They have to reach out and grab - no, seize - their attention.

And they need to spell out the differences. They need to make the comparison unavoidable.

Because it's only if you do these things that you'll pursuade people you've never met to enquire. And be far, far better prepared to sell to them when they do.

Want to know more? See the video.

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