5 Ways to Build Your Business without Competing on Price
When you’re selling the same products as everyone else online (such as t-shirts, DVDs or computers), it might seem the best way to compete is on price and price alone. When all you focus on is having the lowest price, however, you tend to attract a certain type of customer (known in some circles as “bottom feeders”) and find yourself in a race to the bottom, serving fickle, price-sensitive customers who are here today, gone tomorrow (if your competitor is cheaper).
The typical online retailer will focus on price as the #1 motivator for their customers, and while price is important, it’s not the only factor in the buying decision. Below, I share 5 things on which you can compete besides price, so you don’t get caught in a low price war with your competitors.
#1 – A wider range of products/varieties/models
If you sell the same blue t-shirts as everyone else and that’s all you sell, then your value proposition to shoppers isn’t all that great. What if instead of selling just blue t-shirts, for example, you started selling blue t-shirts with different styles (v-neck and collar for example) or blue t-shirts with matching jeans? If you can offer a wider range than your competitors, then you’re less dependent on a low price being the primary/only motivator for people visiting your store.
#2 – A well known company/organization that’s a customer
If you sell, say, computers and you’ve got a well known company or organization on board as a paying customer, you should use that credibility to your advantage (with permission, of course). Put up a “Featured Customers” page and even post a case study or testimonial video from your marquee customer talking about how great your products/service/support/shipping is. Potential customers in similar industries will see the testimonial, which helps build instant trust and rapport, especially if you sell high ticket items.
#3 – A personal approach to customer service
If your competitors are playing the low price but faceless company game, then you should play the moderate prices but small team willing to help game. If you sell to small companies or consumers, then the majority will prefer to buy from a small team who are passionate about what they sell rather than a big no-name corporate. Your About Us page can help here, so make it personal with lots of photos and a compelling “how we came about” story.
#4 – A reward points program
If you can’t compete on price then why not award customers with points for every dollar they spend? They could then “trade in” these points against future purchases in your online store. It’s a great way to build loyalty. You could take it one step further and even send a VIP card in the mail to make your customers feel extra special.
#5 – Constant, informative communication
Using postal mail or email marketing, you should send regular, useful information to your email list (you do have an email list, right?) and customer list (yes, they should be two separate lists) every month. You can talk about new products, link to “how to” videos or reviews for products you sell or even have a customer-of-the-month newsletter. The more you keep in touch with your customers, the better their top of mind awareness will be – i.e. when they’re in the market to buy the products you sell, you’ll pop into their mind first (at the top, ahead of your competitors).
These five strategies are just the tip of the iceberg. If you’re finding that price is the most influential part of your customer’s purchasing decision (if you’re not sure, survey them), then you have three options:
- Deal with it and try to lower your costs and corresponding prices
- Reposition your company and/or target a different type of customer
- Implement one of the five strategies discussed in this article
Which boat are you in?
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