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One Simple Trick to Reduce Price Pressure

Today, hyper-competition is the norm. Not only do you face competition from the company down the street, the success of the Internet and the loosening of international trade barriers have elevated competition to a global level. In addition, transportation has become more efficient, effectively pulling down the barrier that “distance” used to present. And, advances in technology have also helped to pull down the distance trade barrier.

But barriers to entry are falling on other fronts as well. The fact is it’s easier than ever to “set up shop” and enter the competitive fray. The easier it is to set up shop, the more competitors you can expect.  And, this competition doesn’t just grow on one front, it grows on three fronts: direct, indirect, and disruptive.

Today, you are likely to have many more competitors who offer something very similar to what you offer. These direct competitors are difficult enough to deal with. But you are also likely to see an increase in indirect competition—more businesses with different offerings, but still competing for the same dollar of spending. These competitors are difficult to recognize in the first place.

And then there’s that guy trying to make it out of his garage with a completely new technology or an entirely new way of doing something. It’s hard to even see this disruptive competition coming.

But here’s the good news: Even though competitive pressures have never been greater, it has created an opportunity for those willing to seize it.

With the sheer increase in competitive choices, prospects have never been more confused and frustrated about deciding whom they should be doing business with. So, they can’t help but rely heavily on price as the determining factor. This, in turn, creates a race to the bottom amongst the competitive set when it comes to price.

But, what if you recognized and embraced the true root-cause?

What if you recognized that prospects are so reliant on price differences simply because other, more meaningful differences aren’t altogether clear to them? What if you then took steps to more clearly differentiate your offerings from those of your competitors on factors beyond price? What if you gave prospects very clear and compelling reasons to choose your offerings, regardless of price?

Do you think that would reduce pricing pressure? Of course, it would…how could it not?

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