What To Do When Your Competition Lower Their Prices

I often hear people complain to me about competition.

The number one gripe is that almost always, the new competition is cheaper and thus will poach existing clients.  

How can you compete against these lower prices?

The competition’s prices are so low that if you reduce yours any more then there will be no margin left for you.  What do you do?  Use a discount voucher site?  Have a flash sale?  Reduce all product prices by 50%?

No, definitely not, and no again.

If fact, you don’t need to do much at all, unless you’re advertising yourself as offering the cheapest nails in town.

You see, many people believe that most people buy purely on price, and that people only want the cheapest possible. Well, believe me when I tell you that is total nonsense – and I can prove it, too!

Do you buy the cheapest possible food available? (Presumably noodles and own label beans for every meal).

What about clothes?  Do you always buy the cheapest available clothes?

How about cars?  Would you always spend the minimum possible amount?

I think you get my point.

Very few people buy purely on price.  Some do; about 15%.

They will hunt out the cheapest possible products and services.

But guess what?  You don’t want them as your clients anyway.

They won’t be loyal to you and as soon as there is a cheaper alternative available then they’ll be off.

In addition to this, those types of clients will also be cause of most of your problems, always want something for nothing and won’t value your experience or knowledge.

Think about this too; there is also a 15% that will only buy the MOST expensive of any product or service.

People who feel good about themselves when they’ve been indulged and are quite happy to pay whatever the price may be.

Do you think they are a better type of client to aim for?  I do.  So what can you do?

To begin with, you need to add VALUE.  If your salon experience is exactly the same as the cheapest available then why would someone choose you?

You need to do something different, do it well and add some WOW and pizzazz wherever possible.

Make your clients feel like a million dollars.

Offer them free tea, coffee or fizz.  Make sure you’ve got free wifi.  Anything that will distinguish you from the others will do just fine.

Whatever you do, don’t slash your prices and enter into a pricing war, as much like all wars there are no winners, only casualties.

This piece has been adapted from my blog for Scratch Magazine.  You can read the original post here if you wish.