We Will Beat Any Price...

[Branded Merchandise]

Has anyone tried this when trying to secure a customer?

We don't usually do it but I thought I'd give it a shot when I had some online enquiries. Whilst I am certainly no sales/marketing guru, I have come to an interesting conclusion (based on a limited sample)

I suspect that by providing a quote with the 'We will beat any competitor price' type of offer might actually be detrimental to our business. I've no evidence to back this up but my theory is that whenever I have used this offer, it has encouraged people to shop around (when perhaps, initially, they were ready to buy) The customer is challenged to shop around and find a better price. This is probably absolutely fine if you know you are the most competitively priced in your industry but obviously there will always be somebody who sells or does something cheaper than you.

I just thought that was interesting because I didn't expect it to have negative implications. I might have a look on Google to see if anyone more knowledgeable than me has done any research on this!

 

[justDAJ]

Mary Portas did a study of the concept once -- the continual sale/we beat any price. She found it generally had a negative impact. The majority of people became sick of the idea and in the end lost trust in the brand.

Personally I always quote my best price. During the sales price/quote I like to think my clients will know it is a fair price; my best price; and a good price for my skills. Yes, they might get cheaper but also poorer quality.

Constantly undercutting devalues the brand -- in my opinion.

 

[Branded Merchandise]

Mary Portas did a study of the concept once -- the continual sale/we beat any price. She found it generally had a negative impact. The majority of people became sick of the idea and in the end lost trust in the brand.

Personally I always quote my best price. During the sales price/quote I like to think my clients will know it is a fair price; my best price; and a good price for my skills. Yes, they might get cheaper but also poorer quality.

Constantly undercutting devalues the brand -- in my opinion.

That's interesting, thanks. Is it sad that that research might be a contender for some bank holiday weekend reading?

I agree with you, undercutting is a lonely journey to nowhere. We sell promotional merchandise, where there is a lot of competition who sell similar products, so there is a lot of undercutting going around. However, I like to think our clients stick with us because we are proactive about building relationships with them and finding the right product to suit their strategy/ end goal. It's interesting you say the majority of people lost trust in the brand. I guess that is the key in any business relationship, people are willing to stick with who they trust and like, even if it might cost a little bit more

 

[Pete Brindle]

I have tried this, but fortunately it was easy for us because there aren't many music teachers in the local area so I knew the ones that already taught charged more than us for sure!

 

[Scottish Business Owner]

I think everybody gets that competing on price is a road to ruin. Most small businesses probably need to focus more on value than price.

Like Branded Merchandise said above it's all about building relationships and loyalty to your service/product and of course finding the right customers

If all your business can do is compete on price then that's probably not going to be enough.

 

[Pete Brindle]

I think everybody gets that competing on price is a road to ruin. Most small businesses probably need to focus more on value than price.

Like Branded Merchandise said above it's all about building relationships and loyalty to your service/product and of course finding the right customers

If all your business can do is compete on price then that's probably not going to be enough.

I think a lot of customers understand that there's usually an element of "you get what you pay for" as well. So they immediately get a bit suspicious if the price is too low.

 

[Gemma Rowlands]

I will admit that when I started as a freelancer I worked for pretty much nothing at first, because I wanted to build my reputation, but that was for a different reason. I'd never try to deliberately beat another freelancer's price.

 

[Pete Brindle]

I will admit that when I started as a freelancer I worked for pretty much nothing at first, because I wanted to build my reputation, but that was for a different reason. I'd never try to deliberately beat another freelancer's price.

That's an understandable reason to do it though. You're not doing it to undercut anyone else, just purely to make sure that you could get work to make a start on your own career.

 

[Gemma Rowlands]

That's an understandable reason to do it though. You're not doing it to undercut anyone else, just purely to make sure that you could get work to make a start on your own career.

That's right. And it worked very well! Some of the clients who I worked for at the beginning still send me regular work, so I definitely did the right thing (and they are now paying my going rate as well)!

 

[Branded Merchandise]

I would have done the same Gemma. I think if there is transparency, it can work in your favour. For e.g if your client knows you are just starting out and hence the smaller fee, they will probably appreciate that and might be more inclined to give you a shot. I think it would be suspicious if an established business was offering extremely low fees and it would make you wonder about quality.

Interestingly though, when I was working for an accounting firm, there were some smaller firms trying to poach our bigger clients. At times, they would offer a fee that was extremely low (and loss making to them) just to secure the client. With the hope that a) it would attract other clients and b) bumping up the fee in future years

It did work on a few occasions, possibly because of the recession and the budget constraints. However I think most companies were happy paying more for a firm they thought was more reputable (even though you could argue the quality of both firms work was probably the same )

 

[justDAJ]

I read this today and found it quite interesting:

Why your business needs to raise its prices

http://www.businesszone.co.uk/topic/finances/why-your-business-needs-raise-its-prices/56718

 

[Gemma Rowlands]

I would have done the same Gemma. I think if there is transparency, it can work in your favour. For e.g if your client knows you are just starting out and hence the smaller fee, they will probably appreciate that and might be more inclined to give you a shot. I think it would be suspicious if an established business was offering extremely low fees and it would make you wonder about quality.

Interestingly though, when I was working for an accounting firm, there were some smaller firms trying to poach our bigger clients. At times, they would offer a fee that was extremely low (and loss making to them) just to secure the client. With the hope that a) it would attract other clients and b) bumping up the fee in future years

It did work on a few occasions, possibly because of the recession and the budget constraints. However I think most companies were happy paying more for a firm they thought was more reputable (even though you could argue the quality of both firms work was probably the same )

I was always perfectly open about my pricing system, and told the clients that it was because I was just starting out. I found that a lot of individuals rather than companies were happy to give me a shot, because it meant they were able to save a bit of money as well. I did have a few issues with the clients who I took on for the long haul because charging the same price as I originally did caused an issue, as it was obviously not profitable for me and I no longer had to charge so little as I had work coming in whenever I needed it. So that caused some difficult conversations but most of them were happy to pay a little more.

 

[Pete Brindle]

I would have done the same Gemma. I think if there is transparency, it can work in your favour. For e.g if your client knows you are just starting out and hence the smaller fee, they will probably appreciate that and might be more inclined to give you a shot. I think it would be suspicious if an established business was offering extremely low fees and it would make you wonder about quality.

Interestingly though, when I was working for an accounting firm, there were some smaller firms trying to poach our bigger clients. At times, they would offer a fee that was extremely low (and loss making to them) just to secure the client. With the hope that a) it would attract other clients and b) bumping up the fee in future years

It did work on a few occasions, possibly because of the recession and the budget constraints. However I think most companies were happy paying more for a firm they thought was more reputable (even though you could argue the quality of both firms work was probably the same )

They would have to have been subtle about raising their prices though, because if they weren't open about it being an introductory offer and then put prices up quickly, trust could be destroyed before it even develops properly!

 

[Gemma Rowlands]

They would have to have been subtle about raising their prices though, because if they weren't open about it being an introductory offer and then put prices up quickly, trust could be destroyed before it even develops properly!

I was truthful. The clients knew that the prices would rise eventually, but most of them stayed.