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How to Compete with Discounters

  by Jeff Mowatt

    

As the owner of a small to medium-sized independent business, chances are you encounter pricing pressures from some type of a large discounter that sells floral products.

My advice to you is, “Don’t be better; be different.” In other words, don’t even try to beat their prices. Instead, be different in these three areas: customers, offerings and service.

 

Target Different Customers
Don’t waste your time or money trying to attract “bottom feeders”—customers whose only buying criteria is low price. You might attract them with a sale or discount, but they’ll leave you to save a nickel. Let your mega competitor have them.

The good news is that most people do not buy strictly on low price. If that was the case, everyone would live in the cheapest homes, drive the cheapest cars, wear the cheapest clothes and dine only in fast-food restaurants. People typically buy on low price when they perceive no extra value. That leads me to the next area to make your business different.

 

Supply Different Offerings
By definition, mega-suppliers appeal to the masses. They supply stuff that average customers buy. So don’t go there. Instead, position your business a notch above.

Yours is the boutique experience that provides either different products, better quality, expert advice or, preferably, all three. Think about bicycles, as an example: You can buy them relatively cheaply at discount stores, but serious cyclists shop at bike stores or order custom-made online. Either way, they’re willing to pay more for quality. Quality products and expertise is where small businesses can excel.

 

Provide Different Service
Remember: Your goal is to target customers who are smart and who are more interested in quality and value than just buying whatever’s cheapest.

The question, when it comes to service, is, “What are smart customers willing to pay a premium for?” It isn’t friendliness. Nothing wrong with being friendly, but employees at your discounting competitor also can be friendly.

In addition, contrary to popular opinion, smart customers no longer value information. They can quickly find information anywhere — on their smartphones or computers — and it’s free; therefore, it has little or no perceived value.

What customers do value when it comes to service are three things: analysis, interpretation and advice:
• They want a genuine expert who has analyzed the plethora of options that are available.
• They want that same person to interpret which of these options might be best suited to their unique needs.
• They want that expert to advise them on a few options.

This requires that the employees in your shop need to know not only your products and services but also which questions to ask customers to clarify their unique needs. And they need to know how to position narrowed-down options in a way that helps customers make smarter, faster decisions.

When it comes to customer service, remember: This is business. Customers don’t want a buddy or an informer; instead, they want a trusted advisor — and for this, they will pay a premium.

The bottom line is that you will do well by worrying less about beating your competitors’ prices and focusing more on becoming a category of one.

 

This article is based on the bestselling book, Becoming a Service Icon in 90 Minutes a Month by customer service strategist and certified professional speaker Jeff Mowatt. To obtain a copy of this book or to inquire about engaging Mr. Mowatt to work with your team or speak at your event, visit www.jeffmowatt.com or call (800) JMowatt (566-9288).


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