Every industry has a high-end and low-end participant. In most cases, if a low-end competitor comes into your territory, there’s a belief that lowering your prices or price matching will help you retain clients. But is that the only alternative? Most of all, will the reduced prices put you out of business?
I thought about this as I read, “Not Copying Wal-Mart Pays Off for Grocers” featured in The Wall Street Journal.
Many stores, including independent grocers, closed their businesses due to big chain infiltration. But others revamped their focus, catering to customers differently than the overly-crowded competition. Here’s a quote of interest from the article.
But the survivors rallied by redesigning stores, introducing a more relaxed shopping experience and marrying low-priced staples with higher-margin breads, meats and wine.
How would you react if a company selling similar products or services came to town? Value-added services is one option. Extended hours on certain nights or during holiday seasons is another. Also, look at your rates to decide if an adjustment is required. That’s another tactical approach.
Lowering your prices as a knee-jerk reaction may do more harm than good. Let your business be known by customers as the place for great service, and you’ll stay solvent no matter who comes to town.