Every industry has high-end and low-end rivals.
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.
Is that the only alternative? Will the reduced prices keep you in business or ultimately close your doors?
I thought about this as I read, “Not Copying Wal-Mart Pays Off for Grocers” available on The Wall Street Journal website. The article is dated but still contains information relevant to today’s economy.
Many stores, including independent grocers, closed their businesses due to big chain infiltration. However, others changed their focus and cater to customers in a different way than experienced at the overly-crowded competition.
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 opened in your town? Value-added services is one option. Extended hours on certain nights or during the customer’s busy season is another. In addition, looking at your rates to see if an adjustment is required is another smart, tactical approach.
Lowering your prices as a knee-jerk reaction may do more harm than good. Deliver great service no matter what you sell, and you’ll stay in the black no matter who comes to town.
NOTE: If you’re unable to open the above article link, visit www.wsj.com and type the article’s title into the site’s search box.