Competitive strategy allows you lots of options.
Competitive strategy takes more than simply dropping the price.
Discover how lowering price is not the best differentiator when you’re trying to boost sales, profits and market share, and why simply distracting the market with cheaper prices is the last thing you should do.
Is Your Business As Competitive As It Could Be?
No business exists in a totally unique market.
And if they are, well, it’s not for long.
The speed of change is just fantastic.
Today’s new invention is reverse engineered in a heartbeat and a competitor is born in the blink of an eye.
That’s great – everyone can be an entrepreneur, the business playing field is flatter than it’s ever been…and that favours new industries and new market entrants but can be an absolute heartache for more established or traditional firms.
The negative impact on established firms is typically due to 2 key factors:
2. Established customer bases with set expectations
And those can be positive competitive factors, until the established firm is under attack because…the first mode of attack is usually that a competitor drops their prices and leaves the rest of the market high and dry, sweating between wondering whether to follow or to hold tight and pray…
It’s a different picture from the prospect’s point of view; and it’s this view that causes the cracks to appear in the business…indicating that it’s time to SERIOUSLY look at how the firm is selling, marketing, communicating and promoting itself to its prospects and customers.
At this stage the established firm has to accept that:
”Where there is no/very little distinction between what you offer to the prospects and what your competitors offer to the prospect, the prospect will be forced to base their buying decision on the only factor they can base their decision on…..and that is…the PRICE of what you are offering”
Look at it this way:
If you see two identical cars, cars that look identical to you, one is £20k and the other is £25K…which one are you going to buy?
If both cars are identical to you, you will buy based on the only factor that does distinguish from one another – the price.
If that’s happening in your market, that situation will rarely work out well for you or for your business.
When there is nothing else to sway their decision, your prospects will default and use price to make their decision on who to buy from.
That’s not good for your profits.
And any idea of you being able to charge any higher than the market rate….which will be low because your competitors will play to the lowest common denominator….is slim to none.
You will struggle to make any sales above the average market rate.
That’s dangerous territory for you to be in.
Often it leads to a slow decline in profit.
High levels of uncertainty, a hand to mouth existence, struggles to meet the wage bill….
So, how can you break that cycle?
Before we look at that, consider the following:
Here’s the truth, in reality, you maybe supporting your prospect’s choice to buy based on price simply by deciding to swim with your competitors.
So, how about you think about swimming against your competitors instead?
Consider giving your prospects something else, something other than price, to base their buying decision on?
Think about this and ask yourself the same question – How competitive is your business, and how competitive could it be?
During initial pre-engagement fact finds, when I ask my clients ‘How competitive is your business?’ their answers rarely differ.
Furthermore, their answers rarely surprise me, sadly, too many client’s think price is the only, or at least the easiest, strategy to use to build market share and boost sales.
In reality, unless your business has an infinite budget to wage a price war, oooodles and ooodles of cash to spend on marketing and advertising, and a very friendly market, then a lower price is often the very last thing to offer as a sales and market share builder…the risks are too high.
So, how to build a competitive business with a sales advantage that yields higher than market profits?
It’s not as tough as it may seem…there are several things you can to that will cost you nothing at all.
PLUS there is one thing you need to avoid at all costs.
To guide your thinking and give you a diverse range of solutions to consider – download our free business guide – just hit the link for an instant download – Is Your Business As Competitive As It Could Be? Only Dead Fish Go With the Flow.
If you’d like to discuss this area further – call or email using the details below to book some time in the diary
Carol Griffiths – MBA, FInstSMM
0779 002 1885
For more sales and business development insights – head over to my blog Morton Kyle Sales Improvement