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How Your Small Business Can Compete with Lower Priced Competitors

One of the biggest hurdles that small business owners face is competing with larger organizations that have certain advantages – namely, the ability to offer lower prices for their products or services. The cold hard fact is that being able to sell a higher volume can do wonders for costs, which can then be reflected in the final price to the customer. So how can a small business compete? Well, there are certain tried and true ways that you can stand out and win over those customers, regardless of price.

Identify Your Unique Selling Proposition (USP)

Most marketing experts agree that for a business to succeed, they must figure out what makes them different – better - than their competition. This is called a unique selling proposition, and you’ll need to identify and nurture yours if you want to stand out. Maybe your USP is offering the highest quality products, or perhaps it’s superior customer service that sets you apart. Whatever it is, embrace it. Reference it in all of your marketing material, and incorporate it into your slogan if you can. When your customers and prospects understand exactly what makes your business so special, they’ll be willing to pay a higher price to work with you.

Understand Your Customers

Just because you think your product or service is fantastic doesn’t mean that your customers do. To truly be successful, you need to understand exactly what it is that keeps people coming back to do business with you. This will also help you hone your USP. Ask your customers what their favorite thing about your business is. Do they like how quickly you respond to their requests? Do they appreciate that the product you offer is of a higher quality, or that you go above and beyond when it comes to service? Conduct ongoing analysis of your current customer base so that you can continue to keep them happy, as well as draw new prospects in. You may not offer the lowest price, but if you’re listening to and keeping your customers happy, it won’t matter. Never underestimate the power of feedback and how it can help you improve your business.

Take a Stand

The truth is that if you are successful at what you do, there will inevitably be someone who will come along and find a way to duplicate what you’re doing at a lower price. You can pretty much bank on those customers who are price chasers jumping ship and going with this lower-priced competitor. As tempting as it may be, be careful not to fall into the price war trap. Remind yourself of your USP, and stand firm on what made your business a success in the first place. Accept the fact that there will always be customers that will go after what’s less expensive, and focus your efforts instead on continuing to please your loyal customers and attracting new ones that will stick with you for more than just your prices.

When it comes to prices, it’s a given that larger organizations simply have an advantage over the smaller players. But that doesn’t necessarily mean they will always get the customer. Quality, loyal customers care about more than just the price tag, but rather they gravitate toward the company that can offer them the full package of what they need. By learning what your customers want and using that to hone your unique selling proposition, and then standing firm on the value of what you have to offer you’ll be able to rise above the price wars and stand out as a success amongst your competition.

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posted by Rebecca Daneault @ 8:18 AM