On the home page of my speaker website http://www.graememarks.com/, I ask the question, "What is your competitive advantage? Are you cheaper than you’re competitors or better? Many organisations make the mistake of competing on price rather than difference!"
There is a real problem in competing on price because all that does is reduce margin. It seems to me that there is an expectation that customers will always buy the cheaper price.
Here's a question I'd like to reflect and comment upon ...
"Would you pay a plumber $100 to come and unplug your sewer who said 'I'll be there sometime on Tuesday' or would you pay $150 for a plumber who said, 'I'll be there between 10 & 11 on Tuesday'" (I know you pay much more for a plumber but you get my point!!!!)
As I said, I'd be interested in your reflections.
There is a real problem in competing on price because all that does is reduce margin. It seems to me that there is an expectation that customers will always buy the cheaper price.
Here's a question I'd like to reflect and comment upon ...
"Would you pay a plumber $100 to come and unplug your sewer who said 'I'll be there sometime on Tuesday' or would you pay $150 for a plumber who said, 'I'll be there between 10 & 11 on Tuesday'" (I know you pay much more for a plumber but you get my point!!!!)
As I said, I'd be interested in your reflections.
1 comment:
I received in the mail today a letter from a company telling their customers that they were no longer having “‘sales’ or ‘gimmicks’ just the lowest prices everyday”. In fact the letter goes on to say that they are so confident of having the lowest price they’ll beat their competitors by an additional 5%. However there is a comment at the bottom in really small print excluding stock liquidation and contract pricing so they have an out!
So they are encouraging their customers to think about price and to actively shop around their competitors to see if they have a cheaper price! Would a satisfied, loyal customer bother to do that? I’m not saying price is unimportant but is that the best competitive advantage point?
Here’s a chance for the competitors of this company to compete on Total Customer Engagement instead of price. Given that price is the last differentiator not the first, (convenience, range and brand are more important than price), why is this company focusing on reducing margin to get a competitive advantage. There’s an opportunity there for others to differentiate on things other than price.
Discounting should be our last resort not the first response.
Any thoughts or comments?
Post a Comment