Are you losing business to price competition?
When one or more of your competitors cut their price and you’ve missed out it can be very tempting to cut your price and try and compete in this competitive marketplace.
The problem becomes if you start winning work on price then you can also lose it on price… and someone will end up going broke.
So before you cut your prices let’s look at some other things you can do to win the job even if someone is trying to price cut.
1) Ask yourself is the work worth winning?
Not all work is created equal. Not every job, quote or contract is worth winning. Some may have very tight margins, have potential problems or the customer may be difficult to deal with. In some cases it may be a while before you get paid. Be clear about the sorts of business and customers that you truly want to work. In some cases not doing the work can be a blessing in disguise.
2) Value always trumps price
In the absence of value, pricing becomes the focus and it becomes all about price. When you’re presenting yourself to a customer how well do you demonstrate why they should choose you and not your competitor. You need to come from a place of what is so valuable about your business, service or product and focus on that. Think about the different ways you add value around your service, track record and experience. And be sure to relate this back to what is important to your customer. By introducing other factors other than price where you add value then you move the customer’s focus away from price alone.
3) What are your points of difference?
What’s so different about dealing with you versus your competition? What are your points of difference? We’re now living in a world where it’s no longer just about a single point of difference… it’s about all your points of difference. The more points of difference you have which are beneficial to your customer the more likely you’ll win the work. Think about your points of difference that are important to your customers and communicate them in all your dealings with them.
4) Under promise and over deliver
Sometimes it can be tempting to promise all kinds of things so that we win the work. Now it’s okay to promise things but make sure you under-promise and over-deliver. Don’t over promise and under deliver. Always be considerate about what you promise and work really hard in the background to over-deliver. For example. If you say you’re going to get back to them in three days then get back to them in two days. Or if you do quotes and you say you’re going to do a quote in seven days then always deliver it a little bit earlier. The simple act of under promising and over delivering will set you ahead of your competitors.
When you do these four things you’ll find that you’ll win more of the type of work that you’re after and you won’t get so caught up in price wars.