So, here’s a common situation that small businesses find themselves in every day. Your competitor is selling the exact same product as you but for a lower price ? What do you do?
a) Cut your margin and discount your price?
b) Add value and possibly even increase your margin in the process?
If you went for a) you just joined a race to the bottom and possible bankruptcy. That possibility climbs to near certainty if your competitor is more a established and bigger business. Even though you determine to cut every excess cost you can find from your costs, you are still on a hiding to nothing
Your large competitor could wipe you out overnight just by making that product a loss leader… Instead you have to forget about any idea of a price war.
Decide to do something different. Add value.
There’s not a small business on the planet that cannot add a digital element to a product or service and by doing so make itself special. Adding value like this involves a one off cost. Creating a special report, a short how-to video series or a home study course allows you to differentiate yourself and often increase your price in the process.
Here’s an example of how this works…
Lets say you are an author and your on-line book price is $3.25 higher than your competition. Matching the competition is really not an option as your cost structure is too high. You don’t have scale and scope advantages like the big on-line book sellers. To compete, the only choice you have is to add value to your on-line offering that they can’t match.
Decide to add value components to differentiate your offer like this…
- You create a 6 part video based home study course for which you do a product launch knowing that its perceived value will allow you to not just match your competition but actually multiply his selling price by a factor of 10
- With this you bundle in a limited number of signed first editions of your book
- For the first 100 buyers you add an exclusive one-to-one phone conversation in which you give away one more secret that you only recently discovered.
What if your not an author and don’t have time to follow such an elaborate product launch strategy ?
A lite version of this concept is not hard to copy even if you are a bricks-and-mortar business with a strictly local client base. Step #1… is to make a list of the most substantive product or service related questions you get asked. Is there a theme? May be two or three are on the same lines…
You are the expert… So answer these questions in your own words. Just get a pack of postcards and write one main subject header on each one – they are the chapters – Now break each one into sub-sections and pretty soon you will have structured your project properly and have the complete answer planned out into bite sized chunks
Yeah… I know… You don’t have time to sit down and write so let me ask you a question?
Does your smart phone record video? Or Sound? Or Both?
Then just record each section as you are driving along and send them to internettranscribers.com and in a couple of days you’ll have everything back in text. Oh, and you’ll also have the makings of that product launch, I was talking about because you can now bundle the mp3s, mp4s, the ebook that you just created and the original product or service that was being under-cut into one big-value overwhelming offer that your customers really want.
Thinking outside the box like this forces you out of your comfort zone where your small business will thrive. Your customers will relate to you because they can see that you are going the extra-mile to help them reach their goals. They will respect you and look at you as the go-to guy for your product or service
And they won’t hesitate to refer their friends to you to
So resist the temptation to take the easy way out and drop your drawers on price – That way you will become one of the crowd and your product will just be a commodity – Decide to make yourself different. Add value. Create a digital element to your business and pretty soon you to will be ready to do a product launch and make your big brand competitor start shaking in his shoes…
– You may be wondering how much hiring a product launch manager will cost and the quick answer is not as much as you might expect up front. We like to structure a win-win sort of a deal with clients. We get paid when you get paid. That is we work on a percentage of the pre-return’s gross cash that gets dumped into your shopping cart. Naturally, you have to pay a fee to get on our calendar. We can only take on 2 or 3 clients per year so our time is valuable and we must know what our schedule is well in advance. It would be unfair on our other clients if we didn’t insist on this. Find out more by booking a free consultation with me now –