Here’s the best way to execute this strategy. First, identify your competitors who provide the same or a similar product or service. Although this can be time consuming, it’s well worth spending that time up front. Here are several suggestions to help you get started.
First of all, look around you. Who do you compete with during the course of your normal workday? Most business owners have a good sense who their competitors are. Take notes. Write down their names, what they offer, any special deals they offer, their various marketing and advertising offers, collect their ads, sign on to their mailing lists, visit their stores, walk their aisles, ask them questions and make notes how their staff treats you and so on.
Then ask yourself the following questions. First, what prices do you charge for your primary products and services? Second, when was the last time you raised your prices? Third, how do your prices compare with your competitors? Fourth, how does your product or service compare to your competitors? Fifth, do you provide any value-added services that your customer perceives that makes your product more valuable?
Sixth, is it easy for clients to price shop when they buy what you sell? Seventh, do you know your competitors’ biggest weaknesses or failings? Eighth, do you, or can you, specifically compensate for that failing so that you gain vital market share? Ninth, what would you estimate the impact would be on your sales conversion rate if you raised your prices by just 3 percent? And tenth, what would be your increased profit if you raised prices 3 percent while maintaining your current sales conversion rate?
Obviously this is a lot of research, but if you’re about to launch a business, you would do well to understand this information before you open your doors. If you’re already in a business, then you have to do this research to get yourself in front of your competition. However, most business owners are already swamped with responsibility and have little time to invest. So, try this.
Tap into your local resources. Go to your local community college or business school and either hire a business student to do this research for you, or better yet, offer to host an internship for a qualified student. An internship can help you get this research done for free while providing a valuable opportunity for a business student to gain firsthand experience in an actual business setting. In either case, a business student will learn excellent research skills and if you have to hire them it will be for very little money.
Next, obtain the basic research. Give them your list of questions and have them research the answers for you. Ask them to submit their findings in a typed report or an Excel spreadsheet delivered to you by email.
Ask them to break it down into several categories or columns. Make sure it includes the following, names and addresses, a summary of all competing products or services, the prices they currently charge, their individual strengths and weaknesses and their marketing strategies and objectives.
If possible, obtain more in-depth research. Levels of customer support, cost of delivery, your competitor’s primary Market Dominating Position and how they communicate it, their payment terms or options that make it easier for a customer to buy, their risk-reversal strategies including guarantees or warranties and their marketing and advertising collateral.
The purpose of all of this is to help you decide which of these can help you best increase your probability of success. These will help you to better understand what the impact will be of a 3 percent or 5 percent price increase on your business.
Whoever ultimately does this research, here are the best sources for finding the answers. Start with the Internet. Become a mystery shopper and visit their stores or locations. Order from them. Talk to their customers. Analyze their ads. Attend their speeches or presentations. Go to their trade shows and visit their displays.
Effectively raising prices sends that prices increase directly to the bottom line as profit. And since most business owners have not raise prices in years, the impact can have a dramatic impact on the profitability of your business. This is a cost free strategy to increase revenue over night!
P.S. Also remember, to determine how likely your marketing is to convert, simply fill out my Conversion Equation Evaluator.
This evaluator has the unprecedented ability to predict the future success of any marketing collateral you develop… as well as predict whether that marketing will be profitable or not. And, it’s 100% free to use!
After calculating your marketing conversion level, I can show you exactly what to do with your website and marketing collateral that could double or triple the number of prospects who respond to your marketing.
Just schedule a complimentary meeting with me