Don’t make this mistake…❗
You might have seen businesses competing on price with their competitors. Haven’t you?
But wait! Do you also want to do the same?
Are some business guru’s suggesting this to boost your business?
It’s a common yet unfortunate strategy. Stop that thought from becoming a reality right away.
Competing on price, also termed as “the race to the bottom”, won’t give you any significant profits.
Businesses lower their prices to kick the expensive competitors out of the market, but the results are not as expected.
Find out the reasons which will make you think twice before choosing to compete on price with your competitors:
1. Leaves Industry High and Dry
When one business lowers its price, it gives rise to a price war in the market. In order to sustain in the market, even the competitors do the same.
This cutting off prices goes on until the profits evaporate and ultimately the whole industry becomes dry.
2. You Attract a Lot of Bargain Hunters
If you decide to cut down your prices, only people who are looking for discounts will be attracted to your business. These people don’t give any importance to value and quality.
They are not worth doing business with.
In such cases, you’ll never be able to get back on track and raise your prices again. So, chances are high that you will fall onto the slippery slide of the race to the bottom.
3. You’ll Be Forced to Cut Costs
If you have your prices low, the profit margin gap will also be small. In order to make a significant amount of growth and profits, you’ll be forced to cut various costs.
No doubt, the costs for every business should be low, but joining the price race will make you cut down costs that are really important for the smooth functioning of your business.
So instead of lowering the prices, focus on:
- Giving value to your customers
- Provide them valuable content
- Make them your raving fans so that you don’t have to compete on the prices.
All of this can be done by producing content for your targeted audience. If you need any help with that, feel free to comment below.