Competition

Chris_A's picture

How do you deal with competition when selling services and products online? Do you offer them cheaper? Do you present yourself better? What gives you the edge over them?

danielledavidson's picture

I think that giving a little

I think that giving a little more to the payer is what sets me over the edge. If someone wants something done and the competition says that they will give the person 5 photos they take, I say that I will give 6. It's just about trying to give people more, but so long as it's worth the money.

WisTex's picture

Be a High Quality Provider

I try to differentiate myself from the competition somehow, whether that be a unique offering, or simply superior service.

I do not like lowering my prices, as I would rather be the high quality provider that costs a bit more and is the best on the market, than be the lowest price cheap provider that has to cut corners to make a profit.

Scott M. Stolz
Complete Hosting Guide, Editor-in-Chief
WisTex, Director & CEO

Tagobs's picture

I stick with my prize, but I

I stick with my prize, but I might consider raising the quality or speed of my service. I don't like doing stuff too cheap, because then I'll have to fill a lot of orders to actually earn something, and I simply don't got the time for that.

Chris_A's picture

I think that in the beginning

I think that in the beginning, going out of your way and offering more, for a low price, is the way to go, just so you can up your reputation. Later on, you can up the price. But keep offering more then requested. That way you are sure to keep your clients coming back.

danielledavidson's picture

Yeah I agree with you. It's

Yeah I agree with you. It's hard out there, but if you're willing to do a little more work then you will be able to beat the competition. People are always looking for a bargain.

Come In Low With Superior Service

I usually size up my competition and see what they are offering. Then I usually come in with a lower price and superior service. Once you have proven yourself to a new client then the sky is the limit. Most people want quality service over the lowest price. When you give them both from the start it is hard to resist.

WisTex's picture

Raising My Rates Increased Sales

Brian makes an awesome point, and I did the same thing and it was effective.

Although this example is not in online sales, it demonstrates the power of doing research and having the right price.

When I was first starting out years ago, I offered on-site computer training, mostly for corporations. Microsoft Office, Windows, How to Build Websites, that type of stuff. At first I charged $55 an hour, and although that was pretty cheap, I had a hard time getting customers, and the customers that I did get were cheap and wanted me to lower the price more. It was frustrating, to say the least.

I later did some research and was surprised to find out that my competitors were offering the same service for $99 per hour. In fact, that seemed to be the rate. Noone else locally was charging anything other than $99 an hour at the time. (The price is now higher.)

So, still being green, but wanting to earn more money, I increased by price to $79 per hour, a nice jump up from $55 an hour. And knowing that everyone else charged more, I started refusing to give discounts. It was $79 and if they didn't like it, they were welcome to call a competitor and pay $99.

An interesting thing happened. The cheap customers disappeared. They wouldn't pay the $79 even though it was cheaper than everyone else. Sales increased. Yes, you heard that right. Sales increased. Serious customers who did their research knew what the going rate was, and $79 was a deal, but still high enough to indicate that I was a professional.

When I charged $55 a hour, maybe one it 10 serious calls would convert into a sale. (My website already explained everything and by the time people called, they usually were ready to buy.) When I charged $79 per hour, about 50% to 70% of serious calls converted to a sale on the first call. (I define a serious call, in this case, as a buyer who appears to have already decided to purchase from someone, and has called me asking about my services.)

See, $55 was way too low and it screamed amateur, since everyone else was charging double. And I was treated like an amateur as a result. And, well, at the time, I was... even though I always provided great work.

So the moral of the story, when you are first starting out, you need to do your research, and price yourself somewhere near what your competitors are charging, and perhaps undercut them a little. Not a lot, but enough where people notice you are cheaper.

If you provide quality work, this will give you a nice boost in sales, and then, depending on the what you are selling, some nice reoccurring customers.

As you grow, you can start offering premium options that are the same price or more expensive to imcrease profits. But that is another post. ;)

Scott M. Stolz
Complete Hosting Guide, Editor-in-Chief
WisTex, Director & CEO

Spence's picture

I used to

I used to have low prices and always try to compete that way, but that was before I learned that it is ALWAYS about marketing. If you wun a website, it's how you market that, if you offer service on another site like Fiverr, it is how you market yourself and your service. Obviously you can try to "up" your competition for the same price if it doesn't make the work not worth the time for you, and when you start out you are unknown and might have to take what you can get. But in the end, offer after what you are worth considering your skill and time. Go after the customers instead of waiting on them.