If you supply a product, there’s likely a competitor with a cheaper model. The nature of competitive and saturated markets is that the lowest and highest ends of the range are not yet at their maximums. Innovators will always work to create new high-end products with even higher price tags and there will always be a demand for cheaper products. Businesses often drive prices down to establish a place in the market. Competing with these cheaper models can be challenging for companies that value quality. Frequently prices are knocked down through unsustainable or unethical production methods, and many companies aren’t willing to cut these corners. If this sounds like you, read on!
Reflect
Firstly, if you’re feeling at a loss with how to compete with low-cost alternatives, it might be time to reflect. Are the competitors directly impacting sales, or are they targeting a different audience? A lot of the time, very low-priced items do not directly compete with your product and are not a threat. Typically, companies supplying cheaper products aim for high quantities of sales, not quality, so you might find that your target audiences differ.
Find Your Differentiator
Following this reflection, what is your differentiator, or niche? Knowing your niche is important when considering pricing as you have to understand the value of your products and services!
Often people are willing to spend more when a product or service targets a very specific industry problem. For example, in the exhibition industry, many companies offer exhibition stands among other products like café signs, shop fronts and other temporary structures. Since they do not specialise in stands, they often subcontract elements, leading to unnecessary risk.
Very few are exclusively dedicated to exhibition stands but there are exceptions, like Quadrant2Design, a UK-based company. Quadrant2Design is the leading designer of modular, sustainable stands, providing a full exhibition stand service, all produced and managed in-house. Quadrant2Design has such great success with customers, as the company has clear differentiators like the in-house services, expertise and a full pre-build. The company communicates this message well and effectively differentiates itself from competitors.
Be confident in Your Pricing
Cheap products are rarely the same quality as their more expensive counterparts. Not to mention, to make products cheaply, companies often compromise on ethical and sustainable production.
Typically, target markets are split into three sections, lower, middle and upper. Competitors with very low prices will often target the lower segment as these buyers are seeking the lowest price available, however, they rarely win clients from the middle and upper. This is because the middle and upper sections are concerned with more than cost, like quality and sustainability!
If your product is more or less the same as the cheaper counterparts, and your production methods do not differ, then you might need to reconsider your prices. But if your customers are receiving value for money and your services are strong, be confident!
Find Your Audience
Focus on finding a customer base that values your product attributes. Whether it’s sustainability, quality and longevity, or other product benefits. You just need to find the right target audience.
A lot of brands do this by creating a “buyer persona.” This is a character that represents your buyer demographic, and it’s often based on your existing sales information. By creating this persona you can think like your customer base, refocus your marketing strategy, and predict future sales patterns.
Make sure your website has high-value content and a design aesthetic that aligns with your desired audience. People are visually driven and will form a first impression of your website and products within seconds, so you want to make sure you make the right impression.
Communicate The Value
If your prices are reasonable and your product is strong, focus on communicating the messaging. Show that your product is worth more than the alternatives. For example, people often forget that cheaper products can cost more in the long run because of repairs and replacements. Use comparisons to show how your product differs from competitors.
Be transparent about your production methods, sustainability, ethical sourcing or fair pay. Explaining your processes demonstrates authenticity and boosts your value proposition.
Build Strong Relationships
It’s important to have a great product, but it’s equally as important to have strong customer service as it encourages repeat buying, loyal customers and great reviews.
Show your customers you care about their experience and spend time finetuning the customer experience! Work on having great customer support, and personal interactions to build trust among your client bases.
Encourage your customers to leave feedback. Reviews and testimonials give honest insights into your products, which can help prospective buyers to understand their value.
Conclusion
Battling to stand out in competitive markets full of cheap alternatives can be challenging but trust your product and your prices. Businesses shouldn’t have to compromise on sustainability, values or quality to make sales, and the right customer base knows this.
Having success with a higher-quality product comes down to quality, marketing, and communicating your unique selling points and value systems. If you’re ticking these boxes, trust the process!
