How to Combat Undercutting Competition

undercutting competition

As humans, we have an instinctive desire to be the best at everything. We want to make more money, have a nicer house and car, and better “toys.” But in order to have any of these things, we have to be more successful than our competition. When you’re jockeying for sales and customer loyalty, dueling with a competitor can create quite a headache.

While we all dream of becoming the biggest and the best in our industry, some of our competitors have taken to price cutting – specifically undercutting your prices – in order to convince your customers that they can offer them the same quality at a fraction of the price.

What’s worse, this competition isn’t just going to go away quietly.  That makes it your responsibility to respond promptly and appropriately. You cannot afford to let your undercutting competitor distract you from your goals. Don’t give your customers away; take a stand and combat undercutting competition the right way.

Use competitive positioning

One of the most common ways a competitor can beat your prices is by making an inferior product, often attempting to imitate your product, but falling short. However, smear campaigns won’t bring your company any credibility, so avoid this tactic. Instead, use competitive positioning to let your customers – and those of your competition – know about your superior product.

Competitive positioning is how we choose to define our companies and differentiate ourselves from the competition. Choose to not speak poorly about your competition or its inferior products. Instead, show your customers just what makes your product better than the cheaper competition’s product. Through stating the facts, you’ll show your customers and those you want to become customers that your product is worth the money, without risking negative feedback.

Impeccable customer service

When you aren’t able to match the lower prices of your competition, the fight needs to shift to areas of performance. One way to do this is through truly incredible customer service. Not only will a great support staff retain your customers for future purchases, but you can also get rave reviews from your clientele. Going above and beyond really doesn’t require that much. We all hate automated phone systems, so eliminate the issue by always having your phones go to a real person. Whether you want to put people on the phones or offer live internet chat; offering your customers the ability to chat with a human employee is a great way to start.

Another route to consider is to create a customer-friendly exchange and return policy. If a customer isn’t fully satisfied with their purchase, they’re more likely to talk negatively about not only the product in question — but your entire company — if you don’t offer them a stress-free way of correcting their purchase. If you’ve ever dealt with poor customer service, where you weren’t able to return a product, then sit down and think about all of the things that company’s employees did to upset you. Write out everything you can remember, and think about why it made you upset. This list will be a great asset when coming up with your own policies, as you’ll have your parameters set. You already know what you never want your customers to feel. Start there and build up.

When all else fails, reduce costs

You’ve gone over every element of your production, and you simply cannot squeeze another cent out of your company’s production process. What do you do now? Our costs aren’t solely in the production line; we have costs at every level, and thus, it takes investigation into each division of our companies in order to save some real money.

You can further close the gap between you and your competition by making small changes that reduce your overhead costs. Whether you sign up for a merchant services account to take credit cards online, use accounting software to reduce bookkeeping costs, or trade traditional credit card readers for those that allow your employees to accept credit cards with a phone, there are always ways we can utilize technology to reduce our costs.

Photo credit:  Images_of_Money

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Bradley-Derringer-150x150Bradley Derringer is a blogger for TechBreach, giving you the latest on all things tech. 

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