Staying competitive in business isn’t just about winning through the lowest price available; it’s all about differentiating your brand in some way that adds value to the cost of your products and services for your customers.
Competitive pricing involves understanding how your products or services stack against other businesses offering the same thing. Pricing and how it’s perceived is one of the many ways differentiating your enterprise and brand from the rest of the market and knowing how others price can usually help you understand where your pricing should be to attract your customers.
Minimum advertised price (MAP) policy monitoring can reveal a lot about the state of the market and the strategies that your competitors may be using price-wise. Staying lockstep with the price of your product or service in the market can help you adjust your prices to maintain your business’ competitive edge.
Sometimes, however, the most obvious solution—lowering your prices—may not always be a viable option. Fortunately, your business shouldn’t have to rely solely on price reductions to gain a competitive edge.
Don’t Sell Yourself Short
There’s a limit to how low you can price your products before something starts to give. Price a product too cheaply, and conscientious customers get the impression of corner cutting and poor product quality—not a brand image you would want your customers to get. Thus, a higher price than someone else’s, ironically, becomes its selling point.
You charge more for your products and services simply because your product or service is better than your competitor’s. Rather than something to go around, this should be something to be embraced. People will pay for quality since it will satisfy their needs and wants better. Even the mere assurance that your extra services and your product’s quality will give them the confidence to loosen their purse strings.
Sometimes, you’ve got to know what your product is worth. After all, your business shouldn’t have to compete with lesser products
Offer More for Less
Say your product or service is already reasonably priced compared with your competitors, but you’d want something a little extra to seal the deal with your customers. You can’t always price your service for less, but you can often give your client a little extra for the same price to make sure that they’re getting their money’s worth and then some.
Customer service is an excellent tool for this purpose. A good warranty policy and free after-sales service are just some of the offers you can incorporate to your products. These would not only add value to your product but also bolster the image of your business as reliable and helpful. Bundling your product with newer desirable features can also draw your customer’s attention, especially if they add long-term value to your product.
When you’re a smaller player in a big market, you don’t often have the same price buffer as your competitors to go as low as you can go. To combat this, you might consider changing exactly where you do most of your selling. Simply moving towns or neighborhoods, for instance, might lead to capturing a different market for your business. Alternatively, you could move out of your competitor’s arena in other ways. If you’re competing with online businesses, try to capitalize on the benefits offered by a community-based brick and mortar store.
Alternately, you should also consider diversifying your offers. In this way, your business would not only stand out more as a brand but also offer something that your competitors do not in the event that they attempt to woo customers with sales and other price-based tactics.