Do You Compete on Price?

Many companies compete on price.

Some do it intentionally, like Walmart and Amazon, striving to offer the lowest prices on the market in hopes that shoppers will choose them because they’d have to pay more anywhere else.

Others do it without necessarily making it a part of their strategy or brand promise. They watch their competition closely and when prices in their market change, they change with them, not knowing exactly why but worrying that their customer base will simply flock to a competitor with lower pricing.

Why do customers shop with you? Is it because you offer something they can’t get anywhere else? Is it because they support your brand, believe in your promise, agree with your mission and worldview? Or is it simply because you give them the best price?

Value propositions might seem silly to experienced marketers and business owners. But they aren’t. Because when you establish a reason, other than price, for customers to shop with you, you remove the need to compete on price.

Competing on price is hard to do. It will eat into your profits and force you to cut costs everywhere you can.

That doesn’t mean it’s the wrong strategy. But you should know whether or not that’s why customers buy from you.