When last did you do a Competitor Analysis?
This should be an exercise that happens at least once a year in your business.
Let’s first look at the benefits of doing this:
- Fine tune your USP (unique selling point/proposition)
- Understand your competitor strengths and weaknesses
- Regulate the competition
- Define your pricing strategy to boost revenue
- Track the economic climate
- Client retention strategies
- Client acquisition strategies
For the purpose of this newsletter, I want to delve into the pricing
strategy as it relates to your competitor analysis research and outcomes. This is a vital part of your annual planning and has a direct impact on your profitability.
Please don’t simply increase your prices because it’s that time of year
or your supplier has increased prices. That is a fatal mistake that can cost you much needed growth in your business. Rather do the exercise properly and base your pricing on data and a clear understanding of the marketplace.
We have a Free download for you which you can adapt to your
specific business’s services. The recommendation is to have three competitors pricing. Two of them which are closest and most similar
to your business and one which is most similar to your business but in another area, state or province.
For example, if you are a hotel spa then you could do a price comparison with a day spa if the target market is similar and if that day spa is in your capture area. However, if you are a destination spa then there is not much value in comparing your prices to a day spa in the area as the capture market is different. Similarly, if you are an aesthetic center then the comparison needs to be with similar business locations in the vicinity, offering similar services.
In conclusion, and most important, do not be scared to charge
your worth! We often tend to undervalue our services. To be successful you must deliver beyond the expectations of your clients. It’s all about perceived value. If you build your business on price, you can never be cheap enough. Build your business on quality and service, that will justify your price.
Till next week!