The Marketing Boutique

There are early warning signs. Because price wars just don’t happen out of the blue.  You won’t wake up one early morning, scratch your head and say, “S*%&t, I need to lower my prices!”

If you haven’t been following your competition for those early signals, you’ll miss all signs that a price war is coming! When you see increased advertising, larger booth space or aggressive price promotions, best to ask why these are happening. Take the time to investigate what those mergers and alliances in your industry mean to your business, and why your salespeople can’t close more details. 

To help you get a better understanding of your industry and market trends that could affect your pricing, do the following:

  • Follow the news
  • Track your competition
  • List to your customers
  • Conduct an annual SWOT analysis
  • Stay on top of trends and consumer buying behaviours

How to protect your pricing

There are other options such as marketing strategies, tactics, new product developments and loyalty programs) that your company can do to protect its profit margins. Remember, if you feel you need to match your competitor’s prices, you are contributing to the price war.  

Depend on your Marketing department for forward-looking research, early warning signs, and for this team to propose deliberate changes in your company’s position to help remove your company from a price war. Don’t have a marketing department? All you have is one person who creates brochures and updates the website? Hmm, that’s not good.

Don’t Compete On Price

Don’t ever compete on price, people will just think you’re cheap. More importantly, don’t depend on your sales team to dictate pricing. Even when they are complaining, “I can’t make my numbers, the competitor is lowering their prices”!  Do not say, “Match them!”

Instead, compete on product or service differentiation. Increase your advertising spend and add more services to your product. There has to be something that makes your company different and why customers buy from you, sell on that!

Be Cash Flow Positive

During a price war, you will win if you’re one of the larger companies that can sustain a price war or you’ll need to be cash heavy.

Track Your Competition and Industry

As I mentioned above, track, analyse, review your competition and your industry. This needs to be an essential program for your company!

Increase Good Will & Press

During a price war, this is the time to increase your brand visibility. Get interviews, promote what makes your brand different and promote why customers choose you!

This month, I’m excited to welcome Liz Skalla from Skalla Consulting as a guest blogger! Liz is a master in brand positioning. Liz will share her passion for branding and will provide practical and compelling insight on how to develop your brand strategy in this 3-part blog series.

A brand strategy is necessary for all businesses.

Your product and service need to be solving a problem in a unique way to be competitive. True, it takes more work to develop a unique brand especially with today’s complex business environment and difficult to understand where to start when it comes to determining what will be your brand strategy.

The purpose of this three-part blog series is to present a simplified brand strategy, which I’ll break down into three manageable parts. I call it the ‘Brand Strategy Formula – Simplified.’ For today’s post I’ll be discussing brand positioning. Read More

A brand strategy is necessary for all businesses.

Your product and service need to be solving a problem that is unique, different from the competition. True, it takes more work to develop a unique brand position especially with today’s complex business environment and digital world. It can be challenging to understand where to start when it comes to determining what will be your brand strategy.

The purpose of this post is to present a template for a brand strategy, which will be broken down into three manageable parts.  Read More

Competiting on Price is Short SightedIt’s easy. And, I’ve been there.

On the side as a business owner, bidding on a project with the focus on price ‘just to get in’ and as an employee, being part of a price war, where no one wins. It is easy to compete on price. Read More

How to reduce competition

Listening to John Oliver’s take on Net Neutrality, he brought up how Comcast and Time Warner compete with each other – Comcast does not offer their services in a same state if Time Warner is already established in that state and vice-versa.

While this ‘arrangement’ is good for these companies, it isn’t good for the public. Creating a monopoly comes with a high price for the public. The biggest cost is no choice, which means you will pay top dollar for that service. In addition, monopoly controls the messages you receive and gives power to other companies that you may or may not want to support. 

Living in Quebec is no better, all we have is Bell and Videotron.

As a small business, how does this information help you to reduce the competition’s position with your target market?

Competing as The Small Company

Target a certain location: Just like Comcast and Time Warner, target a certain state/province or city and own it. Get the local media to notice you, build a community and know your target market intimately.

Go where the competition is not: It may take more work to enter a new market. If the competition is not serving it, take the time to review it carefully because this may prove to be a great opportunity for your business. Remember, if you are unsure about how to move forward, call us!

Implement pricing strategy: There are certain pricing strategies you can implement to get ‘in the market fast.’ Of course, like everything else, you need to do your analysis first before implementing this type of strategy.

Collaborate for collective impact: A growing trend is putting aside self-interests and collaborating with competitors and other leaders in your industry to build new products and advance shared objectives. A perfect example of this collaboration is with the top 12 Public Relations Firms in Canada; they got together and created a council to promote the business of public relations. At the same time, it helps to advance their shared objectives, keep and win clients.

Increase your marketing budget: You’ve heard it before. You want to get ahead of the competition, then promote the heck out of your company!

Develop processes & Invest in technology: Processes or marketing operations can make or break your budget. Technologies such as CRM, email platforms and websites that connect with each other help track the customer behaviour and provide analytics that will help you scale your company.

Clearly define your value proposition: Most of us don’t spend enough time finding out what makes our company unique. For example, you need to answer these questions: What do you promise? More importantly, can you keep your promise? Why should your target market listen to you? Buy from you?

Customer Conversations: Once you’ve started to get clients, have you stopped to talk to them? Ask them why they bought from you, or why they left you for the competitor? Customer insight is invaluable.

What Not To Do

Create a pricing agreement with competition: While Comcast and Time Warner’s market entry planning looks more like a pre-agreement than strategy, I suspect they didn’t call each other to agree on pricing. Price fixing is against the law.

Promote your company as the only guy in town: Just like Comcast and Time Warner, they never promote, “Hey, we’re the only cable company in Boston!”. Instead they advertise, “Switch to us!”

Trash the competition: Don’t, just don’t. You’re company won’t look good and you’ll put too much attention towards the other guy.