5 Ways Your B2B Business Can Beat The Frustration Of Competitor Price Wars
It may feel that sometimes the only way to compete with larger businesses in your sector is to offer lower prices, but this kind of ‘race to the bottom’ price war only normally benefits the largest companies. Instead of engaging in the frustration of a competitor price war, allowing this to dictate your marketing strategy, focus on your core marketing propositions and what you want to achieve for your business.
1) Define your goals
Some companies feel pressured to enter a price war just because someone else made a move, but they don’t always understand the impact in the medium to long term. You’ll want to define your most pressing financial goals and use them to trace a red line, beyond which lowering your prices would take you in the opposite direction of growth. In other words, it should be crystal clear to the company’s decision makers when they should retreat and when they should stand firm.
Also, bear in mind that if you react to every price drop a competitor makes, customers may eventually come to expect you to keep lowering your prices. This could set a dangerous precedent that undermines other sales points, such as value and quality.
2) Be clear about your price policies
If you’re willing to compete on price, make sure your policy is clear. For example, if you will match any price, state it on your website. This could deter competitors from starting a price war with you.
3) Know the customer's price sensitivities
Every customer wants value for money, but some buyer types are more price-sensitive than others, so start with a solid understanding of your buyer personas and how they determine value. Most B2B buyers make purchase decisions on factors other than upfront price – especially lifetime cost of ownership and ROI.
If you’ve done your research and your product or service is a good fit for your target market and buyer persona, then be proud of your prices – it’s worth the investment and your marketing material should focus on explaining why.
If your price range sits within the price sensitivities of the final customer, you can focus on creating more value or quality while maintaining your price as it is. If you make data-driven decisions about prices, you can be known for offering a value-driven service that ‘no-frills’ competitors can’t offer. This is a powerful sales point among many buyer groups.
4) Educate consumers
You can inform and educate buyers with your marketing about the price-quality relationship, so they know when they’re getting good value for their money and when they’re not. Then, if your competitors drop their prices, consumers may already be aware of how this move can affect product or service quality, and they may be less likely to made decisions exclusively based on prices. These are good angles to take when creating content for prospects in the awareness and consideration stages of their buyer journey.
5) Get endorsements from influencers
Regardless of how well you market your own products and services, there will always be competitors that prefer to cut corners and try to engage in a price war. If you’ve positioned yourself correctly in your website content, blog articles, and other online content, you don’t need to feel threatened by this.
However, if you can, get a prominent influencer or market leader in your sector to recommend or publicly support your company to keep it at the top of buyer’s minds during a price war, even if you don’t change your prices. This support could take the form of a customer testimonials, reviews, collaborative webinars, or even an interview.
This type of endorsement has become easier thanks to influencer marketing, which can help B2B companies be more resilient to price wars when conducting a digital marketing strategy. For example, data from 2020 shows that Asda, Currys, and Argos knew they couldn’t possibly compete with Amazon on all fronts, so they stuck to certain areas in which they could lower prices, and others in which they would stand firm. They consistently offered lower prices on electronics and video games, but they didn’t enter a price war with Amazon in office supplies and home improvement.
Find out more
At JDR, our goal is to help you find the largest possible market for your products and services, with a margin that enables you to deliver excellent quality while simultaneously growing your business. To find out more about our approach to digital prosperity, and how you can support your branding and value proposition through targeted content, please call 01332 343281 today.
Image Source: Unsplash