When there is no competition, there is no business either. Every business has competition regardless of its size & product.
Also, when there is a competition, there is a price war.
When your products are selling for the same or lower price on Amazon, it is difficult to meet the break-even point and make a profit.
Forget about marketplaces; you are not the only seller for particular products unless you are selling something really unique which no one has thought of.
Cutting off the product price doesn’t guarantee to beat the e-commerce price race.
Lowering your prices to beat these big e-commerce giants is foolishness.
You might end up making massive losses and eventually step out from the market at all.
In this article, we are going to discuss how to win when your competitors drop their price.
Competing on price is a bad idea.
By lowering your price, you may get customers who buy from you but let me tell you it is not a strategy that works in the long run.
When someone is buying because of the cheap price you are offering, they are not loyal to your brand. They are more likely to switch to the alternate option the moment they find it at a lower price.
Competing over price is a never-ending fight.
Remember, your competitor will also be prepared to sell at lower prices.
As soon as you undercut your price, your competitor will do the same to beat you, and this goes on, and you may end up incurring a loss.
The customer psychology plays a huge role.
It is buyer psychology that you get what you pay for. When people see a low-cost product, they are likely to assume that it’s a poor quality item and vice versa.
Buyer equates low price with cheap quality.
They may think that something is missing.
They may even doubt on having hidden costs involved.
Not to forget,
Once you start cutting down your price, you need to sell more products to make the same amount of profit.
Here, you are you are playing fool.
You need to understand that your competitors’ prices will fluctuate. Your business operations should be independent of that.
What you can do instead, is find smart alternatives to competing on price.
There are numerous ways you can compete with your competitors besides price.
However, at the centre of all of those tactics is “Value”.
Focus on providing more value to your customers and chances are high that they will come back to you for the next purchase.
Make your customers feel that your brand is offering more than just a product!
Price is a financial reward for your product wherein the value is what your customer believes the product is worth to them.
Show the worth of your products to your customers.
Differentiate your products by offering the benefits and emphasize on product benefits instead of its features.
Imagine a conversation wherein you are stuck with someone who just talks about themselves and has no interest in your say.
Understand that people are least interested in you and your product. So stop bragging about your company and brand when you are trying to sell them your products.
Buyers want to hear about what they will be getting from your product. They want to know what value your product will bring to their lives.
I would suggest following the below steps before communicating your product benefits to your audience.
1 – Make a list of your product features
2 – Determine what each feature actually does
3 – Learn how these features will fulfil the desire of your audience
4 – Connect these features emotionally with buyer’s persona
5 – Highlight the emotional impact
It is uber important to understand that your product features are important but do not brag about them from the selling point of view.
Present them from the buyers’ perspective. What impact your product will have in their life.
How your product will make their life easier?
By highlighting what is essential to the user, you are creating a distinct stand from the competition.
If you learn this art, you have already won half the race.
Strike an emotional chord in your pitch to grab the attention of your audience.
You can pair your products with complimentary service.
Think about the services you can offer that pair well with your products.
Differentiate from your competitors.
Not in terms of different products but by offering a distinct value attached to the product.
People like convenience.
Make it super easy for people.
Right from browsing your product till the after sale service.
One key to understanding the shoppers’ buying behaviour is the “importance of convenience to your customers”.
People like simplified things. They purchase online to save time because it’s comfortable and convenient.
Prove them right by offering the utmost convenience. They are even willing to pay more for that.
Provide them with excellent delivery options.
Introduce customer-friendly policies such as 30 days’ free returns, quick refund, Easy exchange options, etc.
Use the power of online reviews
Nearly 75% consumers claim that online reviews influence their buying decision.
What you can do is,
Simply ask your customers to give a review. Do take polite and friendly follow-ups.
Offer a discount on the next purchase. It’s a win-win situation for both the party. You are retaining a customer for the next purchase.
Leverage customer reviews not just customer acquisition, aim to increase customer retention.
Online reviews have the power to influence and manipulate customer opinion even before they have visited your store and make a mind to have a look at your products.
Send thank you notes to your customers. Show gratitude for their purchase.
Make them feel special by sending them a handwritten thank you notes.
People love to be acknowledged.
It may not work for a long run, it may not be convenient for you to send a personalized handwritten note to all your customers, but it can get you a few loyal customers at the beginning and spread a positive word of mouth about your brand.
Change your product’s positioning
Understand what your customer needs are and position the product.
Craft the key message carefully.
Convey the differentiating value-added aspects of your product.
Remember it has a significant impact on the ultimate purchase decision.
If people do not find any value in your product, they won’t mind dismissing it in a heartbeat.
On the other hand, product repositioning is not a small change.
You need to research the buyers’ persona and consumer psychology carefully.
Apple has positioned its products as premium products. They always focus on featuring product benefits and the value they add to people’s lives rather than the price.
In case you are positioning your products as premium, learn whether your target market has enough purchasing power to afford your products.
Determine the cost and resources attached to the product repositioning.
You may have to change your product quality, packaging, website design, etc. which might require a reasonable amount of time, effort and money.
One of the best positioning strategies is content marketing.
Take help of content marketing
Content marketing can prove a boon to your business.
People love to read useful and relevant content which solves their problem.
Content marketing builds brand awareness, trust and loyalty.
Quality content helps people to engage with your brand and make sound buying decisions.
Good content fosters the healthy relationship with customers.
You can win an entire game if used this marketing strategy effectively.
Learn more about e-commerce content marketing
Show product scarcity
Scarcity is one of the ordinary yet important tactic of converting your website visitors into customers.
Scarcity can be of several types.
1. Displaying a very limited quantity of products.
2. Offering a discount for a limited period.
3. Providing additional benefits associated with the product for a limited time.
When you are using this tactic, make sure you are keeping your words. If you are converting customers with a limited period discount, keep tour words and end the discount period as you have mentioned.
If you fail to do so, it can damage your brand reputation severely.
Here, you need to be true to your word.
Explore new market
Do you sell in a specific state or region?
Try exploring the new market for your products.
Consider expanding your business nationally/ internationally.
Expanding online is a great way to access new markets and experiment with different pricing quickly. It opens up a new market, new customer base, new strategies, and considerably higher revenue.
The best way to avoid price war is not to get in at all.
You are going to make a huge loss by continually dropping your price.
Instead, focus on providing value to your customer. Win customers by improving the overall user experience.
Showcase the product quality and benefits while marketing your products instead of prices.