Everything in business comes down to transactions, so to beat the competition, all you have to do is offer a more valuable or appealing transaction than your competitors. If you’re selling a comparable product, which most retailers are whether or not you want to admit it, oftentimes a consumer’s decision will come down to price. If you can slash your prices to be lower than those of your competitors, most of your problems will be solved. But, you can’t slash your prices infinitely. You still need to make a profit.
So how can you make your product, a.k.a. your offer, more competitive when you can’t lower the price any further?
1. Work on your support systems. You’re selling more than just a product. You’re selling a full experience. Whether it is toys to children or flowers to the community, eventually your customers will have to contact you for some reason. They may have a question, a complaint, or a special request. There’s a value in offering a better support system, such as a more in-depth FAQ and help section of your website, or a customer service department that’s highly trained. Work on improving these systems and then promoting them like crazy once they are up to date.
2. Offer guarantees or warranties. A simple guarantee almost always increases conversion rates, because guarantees generate feelings of security and trust. Shoppers are cautious that what they’re buying may not be as good or as durable as they think it is, and a guarantee or warranty can help to quell those feelings. Depending on the strength of your product, these offers may end up costing you more money per product, but in most cases the extra cost will be worth it for the perceived value it adds for consumers.
3. Experiment with bundles. If you and your competitors are offering the same products, consumers can compare apples to apples. So if you can’t compete one-on-one like this in price, experiment by offering your product in different bundles. For example, you might offer discounts for buying your product in bulk or signing up for repeat purchases. You could also pair your products differently, or offer different collections for different prices. There are pros and cons to bundle pricing, so do your research here and make sure you’re increasing overall subjective valuation.
4. Throw in bonus offers. Bonus offers don’t have to be exceptional or pricey, but they can easily tack on some extra value to your core product. For example, you can make like a grocery store and throw in a free tote bag with every purchase, or even better, opt for a “mystery gift.” Gifts and bonuses can be as cheesy or as serious as you want. Either way, this is an effective tactic to outcompete a rival who’s able to undercut you on price alone.
5. Differentiate your brand. Don’t forget there’s a subjective value in dealing with your brand, specifically, rather than any other. A consumer may choose to buy a product from a brand they personally identify with over a similar product from a less recognizable brand—even if it costs more money. Work to differentiate yourself from the competition by choosing a specific niche, keeping your voice and image consistent across all platforms, and coming to users with a value that’s truly unique in your space.
6. Make it easier. If you can’t objectively increase the value of your product or decrease the price, you can at least make the process of buying and using it easier. If your checkout process is just a few seconds faster than your competitor’s, for example, your shared customers will be able to notice the difference, and they may slowly gravitate to your system as a result.
7. Make it rewarding in other ways. You can also work to make your product rewarding in other ways to your users, and promote these reasons to purchase it. For example, if your product is made from recycled materials, you can emphasize this to cater to the environmentally friendly crowd. You could also add an incentive, like donating a portion of all your proceeds to the charity of your choice. The key is to give users some additional good feeling or value in buying your product.
Price may be an important factor in consumer decision-making, but only because it’s an indicator of value. What customers really want is an offer that’s worth a certain amount of money, so if you can adjust your offer to increase its subjective valuation, it’s often well worth the effort to do so. Perform some market research, with surveys and subjective user analysis of your offer, to see whether these modifications work for your products. You might be surprised at the results.