27 Apr How to beat your competition
When you look to beat your competition, you’re looking to remove yourself from them. Let me explain.
Pricing wars are a slippery slope and lead to your product or service becoming a commodity.
It’s a slope that 99% of businesses don’t want to go down, and it would be hugely detrimental to your businesses growth and longevity if you did.
Don’t kill your business
It’s hard when your competition underprices you and you feel the pressure to go further and further down the rabbit hole, lowering and lowering your prices. Doing this can kill your business. It’ll kill your profit margins, and completely devalues what you’re trying to sell.
We often get asked how you can position your product and services in such a way that you’re immune to the pricing wars.
The key is to add more value.
The key is, to add more value.
Now, you can, of course, do this by increasing the value of the product or service you deliver for the current price, meaning bolting on an extra item for free or including additional services, but what I’m talking about is selling extra value they obtain from their purchase.
For example, say your company sells electric bikes. You’re in competition with other electric bike companies, and the bike specs are near identical.
Price seems to be the obvious differentiator and thus most of your competition will be using that exact tactic.
Electric bikes are very expensive and so a decrease in price may attract a certain amount of customers.
But say you decide to add value on to your product. Say you decide to add emotional value. Imagine your marketing materials said, “you’ll actually fall in love with exercise again”.
This has attached an emotional value to your product, that rationalises the higher price.
You’re now selling an e-bike and a love for exercise.
How much do you think a love for exercise is actually worth?
How about if you also added value by social recognition. Increase someone’s status and they’ll love you for it.
People pay a lot for status
People pay a lot of money for status.
What if you were to say in your marketing materials, “Be an early adopter” or, “live in the future, today”. You then have a social component attached to your product. An increase of status from your ‘tribe’.
Is there a social component you can attach to your products and services?
And then a huge one, is there a larger philosophical stake that you’re offering? Giving your customers the identity of being somebody that saves the environment is a great one.
If they stopped taking their car to work and actually took their e-bike to work, they could contribute to saving the environment, people will respect me, and I’ll fall in love with exercise again.
You just doubled the price
Guess what you just did to the perceived value of your e-bike? You just doubled the price and you didn’t add anything to it. You’ll decrease your CAC and increase your conversions dramatically.
What we’re talking about is framing the product in such a way that your customer sees the emotional, social and philosophical value that might also come from that product.
Even though your competition is selling the same thing, they’re not taking the time to frame it to give emotional, social and philosophical value, and do you want to know the best bit? You build a brand that people love.
That’s how you keep from decreasing your prices.
That’s how you beat your competition.
Create a process for how you’re going to beat your competition.