If you’re in an industry with even one or two direct competitors, you can implement a reasonable competitor-based pricing strategy. To understand this method, let's examine what it entails and uncover the competitive pricing advantages and disadvantages before exploring who should and shouldn't utilize this tactic. Data eliminates that space as much as possible, with information about your competitor's positions in the market, to get as focused on the target as possible. Think of pricing as a game of darts where you’re trying to hit a bullseye (the perfect price), but there’s all that extra space on the board. Remember, pricing is a process that eliminates as much doubt as possible for a key stakeholder to make a profit-maximizing decision. We elaborated on this assertion in our pricing strategy post, but the key is that a 1% improvement in price optimization results in an average boost of 11.1% in profits - a huge impact!Ĭompetitor-based pricing can help you get there if done correctly. No other lever has a higher impact on improving profits. Pricing is the most important aspect of your business. Our first post was about cost-plus pricing. competition-based pricing or price intelligence). This post concerns competitive pricing (a.k.a. Long story short, make it as simple as possible for your audience.Welcome to the second post in our series on key pricing methodologies, highlighting their pros and cons. If your competition uses text and images, create a whiteboard or animation video to explain the benefits of your product. When someone hits your site for the first time, give them exactly what they need and eliminate any distractions. Provide a Better Customer ExperienceĪt the end of the day, it’s all about delivering a better first impression than your competitors. Christopher Rodgers Colorado SEO Pros 7. If you’re struggling to find a reason why you’re better, then you may need to revisit your business strategy and identify where you offer the most value. Then you can distinguish yourself with the right marketing and messaging. You have to prove that you’re better first in order to justify higher pricing than your competition. We perform SEO with a wider scope and greater depth. We had to clearly describe our unique processing system and extremely high-quality standards to make it clear that not all moringa is created equal. Make It Clear Why You’re BetterĪt Kuli Kuli, we often have people ask us why they should pay more for our organic moringa powder when there are hundreds of people selling organic moringa powder online at a lower price point. This is the story you want to share, and that should lead towards more flexible competitive pricing strategies. Craft a compelling story that truly builds brand equity amongst your customer base. But remember: Your brand’s most important client is itself. And, you’re ready to truly hit the market. Use your competition to learn more about your market, and pivot accordingly. Perhaps you will understand a marketing angle they use or a feature that they leverage in a unique way that is driving customers toward them. The market determines quality, and if they like your competitor, that’s an opportunity for you to learn why. Just because you believe a competitor is lower quality, it may not be. Hold your ground with respect to your competitor pricing strategy. Racing to the bottom can hurt your company long-term. You may need to educate your customers on why you’re worth the extra money, but don’t be in a hurry to beat the other team on price. Make your positioning on quality and your unique offerings. You can still hit the entire market by offering multiple tailored solutions for each sub-category. Find a way to tailor your product or service to sub-groups of customers. If a client has the choice between a cheap offer and an offer that is specifically geared towards them, they will choose the latter nine times out of 10. There’s one thing a client will always privilege over low cost, and that is specialization. The answers below are provided by members of FounderSociety, an invitation-only organization comprised of ambitious startup founders and business owners. Question: How can I distinguish my startup Pricing Strategy from a lower-priced competitor?Ĭan’t figure out how to beat your lower-priced competitors? Don’t let predatory competitor pricing strategy destroy your business.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |