We all have to make a living, but if you decide to undercut your competition know it could make you unpopular and not necessarily reap the benefits you expected.
I normally offer the following thoughts when you are thinking of undercutting your competition:
Make sure you offer less if you do cut the price of your product or service, an example might be if you are printing flyers for your client delivery is not free, or they have to fold the flyers to make up for the price cut.
If you do not offer *excellence* to your client, after offered them a discount and they are not satisfied they will return to your competitor and be willing to pay more.
Once word gets out that you are less expensive than your competitors you may have more business but do you have the loyalty of your customers? Will the grab the discount and run, never to return?
How long can you operate by offering a discount that undercuts your competitors?
Ensure your long and short term goals are clear and ultimately, you may decide to offer true value, at a price that is fair for the marketplace and work on strategies that offer long term benefits versus short term gain.
As an owner of two small businesses I know the benefits of building relationships with my competitors and sharing tips with each other. This leads to trust and long term connections, which may lead to referrals from your competitors for a variety of reasons. They might have a client they cannot look after and know you have the products and services that would work for their client.
It is up to the individuals to make a choice on this topic, but always know you can sleep at night and not toss and turn worrying if you did the right thing.
Comments welcome thanks:)
- Log in to post comments