Setting a price for your product(s) is already a difficult task. What is too high? What is too low? You want to assert your product’s value without pushing beyond the limit of what people are willing to pay. That in and of itself is hard, but throw in a price-checking culture that will immediately search for competitors and compare prices and it becomes almost impossible.
In order to make the right choices though, there are some thoughts to consider:
Don’t be too aggressive; profitability is a process.
When you are first starting your business, you will face many initial costs. Some may be recurring but others are one-time fees and those burdens will ease up. You will not be able to stay competitive if you try to immediately compensate for all of your budding costs. Profitability will come once the business stabilizes. Be patient and anticipate some losses initially.
Know what your competitors are charging.
In order to get a clear picture of where you stand in the market, you need to know what you’re up against. Routinely checking and even tracking your competitor’s pricing and pricing policies can help you be prepared for your customer’s price concerns.
Make sure your brand adds value.
Sometimes you cannot compete on price, especially when you’re in the beginning stages and your costs are higher. If that’s the case, you need to add value in the form of stellar service, personalization, or some other kind of reward. Make your brand seem like the better choice by enhancing the customer experience and you’ll see that customers will keep coming back.
The adoption of internet price comparisons has made competitive pricing more transparent. As much as 90% of consumers have identified that they hunt for the internet’s best deals and as a consumer, this transparency is awesome. But for retailers, it may seem like a competition they cannot win. It is important to keep the above tips in mind in order to power through. A brand’s customer experience adds a significant value that could help your business stay competitive.