Price is Not a Market Differentiator For Entrepreneurs

Are you struggling with market share, disloyal customers and pricing? If your market share is steady or declining, if your sales force can talk of nothing other than pricing then you need to take a good hard look at your business growth and your business plan.

We live in a business environment where market share is really tough to get. Customers are no longer loyal - they will go where they perceive they get the best deal and that does not always mean only price although price is a big piece of it. There is still service, personal contact, tightly targeted marketing, value add and yes, some loyalty that makes up perceived value.

There are very few businesses that can operate on a low price strategy. It is very difficult to do and you must have the systems, scale and infrastructure that will allow you to do that not to mention vendors who are willing to operate at prices that you need and want. Walmart is a good example of this. They are huge and they have everything in place to make it work. You are not Walmart and you cannot compete on a low price strategy alone. If you try to you will probably under value your own company and find that you are not financially able to grow.

What you need to do is to invest in your business strategy. Work with a coach to make sure you have done a good job and that it is complete and solid. The revisit it quarterly so you can make mid-course corrections as needed to stay ahead of your market.

Speaking of your market, that is where they real key lies. It is really important to segment your client/customer base. Be as specific as you can be but remember that the more segments you have the higher the cost structure you will need to bear. Think through this carefully and build it in to your growth plans. The most important thing you can do is to carefully position and execute on your market segment ownership plan. A wise way to address your market segment is not by going at it in the traditional way e.g. via demographics but to try to determine what need or want the market segment has that your business can best serve. For instance, your market segment may be smokers whose physicians have told them they must quit or expect severe health problems; or adult children looking for specialized care for their parents; or parents needing help getting their teenagers lined up with possible scholarships. Whatever it is, target carefully and very specifically. That will help mitigate some of the low price competition issues.