I recently noticed that one of our competitors has been very aggressive in slashing their product prices. Although our costs are relatively low I am not much of a fan in reducing our product prices to a point of only earning a dollar in profit. Which is rather stupid in my opinion. With such drastic reduction from them, many of my customers have flocked to them instead.
Have you experienced something similar? Can you share some tips on how can I win back my customers?
Thanks in advance.
If you are competing on price then you will be at the mercy of this. You need to differentiate your product based on factors other than price so that customers will choose your product anyway.
The other option you have is to influence who you are compared to. Find a way to put your product into it's own category so that it cannot be compared to these.
You might even have a "comparison" page where you list some of your competitors in a table and compare the features and prices, this way you can choose which competitors you are compared to (tip: don't choose the one that is lowering prices like crazy).
Based on a comment, it sounds like you're a reseller and your competition sells the exact same items.
Negotiate with your supplier You may discover your competition is getting a better deal. Ask the vendor if they have any influence on suggested retail pricing.
Improve your terms What are your payment options? Credit card only? Could you do 90 days? Hard to say not knowing your industry. What about return policy?
Pricing Could you offer better volume pricing? I'd bet you'd be willing to make a dollar profit on an item if you could sell a million of them at once.
Better Service Suggest other complimentary items. I hate to buy an electronic device and the sale clerk doesn't bother to ask if I need batteries.
I don't know your business, so it is difficult to make suggestions. Selling larger price ticket items sometimes require more personal contact. If customers just know you by your website, they have no problem leaving for better prices (unless your site just works do much better and you actually deliver on time). Is there an opportunity to educate this industry on what they should be looking for when they buy these types of things? If they learn to look for more than just price, you may win them over if you offer that and your competition does not.