How to Compete with Discounters
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If you manage a
small to medium-sized business, chances are you encounter
pricing pressures from some version of a large discounter.
Large competitors may have
more money to
spend to attract new customers, more buying-power to undercut your
more resources to outlast you in a price war.
If they’re from overseas, they may also have cheaper
That’s why when chambers of commerce and
associations bring me in to
speak to business owners on competing with price discounters, my
be better – be different.” In
words, don’t even try to beat their prices.
Instead, be different in these three areas…
Don’t waste your time or money trying to
attract bottom feeders. These
are customers whose only buying
criteria is low price. You
them with a sale or discount, but they’ll leave you to save a
nickel. Let your mega competitor
have them. The good
news is most people do not buy
strictly on low price. If
that we’re the
case then everyone would live in the cheapest homes, drive the cheapest
wear the cheapest clothes, and only dine in fast food
restaurants. People typically buy on
low price when they
perceive no extra value. That
to our next area to make your business different…
By definition, mega-suppliers appeal to the
masses. They supply
stuff that average customers buy.
So don’t go there. Instead,
position your business a notch
above. Yours is the
that provides either different products, better quality, expert advice,
preferably all three. Think
bicycles… you can buy them relatively cheaply at department stores, but
cyclists shop at bike stores, or they order custom-made
on-line. Either way, they’re
willing to pay more for
where small businesses
do well and make more money.
Remember your goal is to target customers who
are smart; more interested
in quality and value than just buying whatever’s cheapest.
Contrary to popular
opinion, smart customers
no longer value information. Before
smart customers even contact your business, they’ve already collected
information about you and your competitors.
They’ve given their smart phones a shake or searched Google.
It takes them less than a second for the search and the
free. Free is
means that if your employees are merely
providing information to potential customers they aren’t really
perceived value - at least not enough to warrant charging a premium.
The question, when it comes to service, is what
are customers willing to
pay a premium for? It
wrong with being
friendly, but employees at your discounting competitor can also be
friendly. More to
the point, your
customers already have friends. And
they’re also free.
What customers do
it comes to service are three things: analysis, interpretation and
advice. They want a
genuine expert who has analyzed the
plethora of options that
are available. They want that same person to interpret
which of these options might be best suited to that
customer’s unique needs. And
that expert to advise them on a few
requires that your employees need to not
only know your products and services; they also need to know which
ask customers to clarify their unique needs.
And they need to know how to position short-listed options
in a way that
helps customers make smarter, faster, decisions.
These are easy techniques I teach in my
When it comes to customer service, remember -
this is business.
Customers don’t want a buddy.
They don’t want an informer.
They want a trusted advisor.
For this, customers will pay a premium.
Bottom line, managers and business owners would
do well to worry less
about beating their competitors’ prices, and focus more on becoming a
About the Author
This article is based on the
book, Becoming a Service Icon in 90 Minutes a Month
customer service strategist and certified professional speaker Jeff
Mowatt. To obtain your own copy of his book or to inquire about
for your team, www.jeffmowatt.com
call toll free 1-800-JMowatt (566-9288). Influence
with Ease ®
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Article Published/Sorted/Amended on Scopulus 2010-12-03 10:59:47 in Marketing Articles