How do you deal with low-cost competitors?

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how to deal with low-cost copetitors

Of the conversations I have with my clients, one question that comes up, again and again, is how do you deal with low-cost competitors. One of the most important things is to have created your really good category of one, and then the top three things ways that you can compete are:


Speed in everything you do. Being more expensive than your competitors is one of the smartest business models you can have, what it means though is you need to be faster than everyone else.

  • Your website – can customers find the information they want faster on your site than any of your competitors?
  • Your responses – can you respond and reach out to your customers from their first enquiry faster than your competitors?
  • Your quotes and proposals – do you send your quotes and proposals out faster than your competitors?

Everything has to be faster because speed is of the essence when you are competing with low-cost competitors.

Be willing to show more

When you are more expensive then you must be willing to show the things that demonstrate value, so when your customers see them they say “Ah, that makes sense, that’s why they are more expensive”. If you are in manufacturing then show the manufacturing process. If it’s because your staff are better, more experienced or more highly trained then show the details of how this is true.

Why is this important? Because the low-cost competitor is not taking the time to do this. So along with being faster, showing more is another great way to compete against your lower-cost competitors.

Admit you are more expensive

You have to be willing to openly admit that you are more expensive and then say WHY you are more expensive. You have to own the reason why and turn it into a competitive advantage.

Take a look at one of my clients, iScream, a gelateria in Oxford. They openly say they are more expensive, and this is taken from one of their most recent Facebook posts:

We will never compromise on our product and yes, we could cut our costs and increase our margins using cheaper products but that will never happen! It’s not what we are about. We deal directly with our organic farmer for our amazing milk and cream from a rare breed organic Guernsey herd close by to where we live.

And if you look on their website you will even find the story behind the cows.

They also use local producers for their fruit and other ingredients. iScream are not shy about saying why they are more expensive and they use it to create an advantage over their competitors.

And this isn’t just true for gelato it’s also true for B2B, it all comes down to understanding human psychology.

So remember if you are competing against low-cost providers, you can’t be the same, the same as everyone else, you need to compete better, you need to compete faster, and you need to be prepared to own it and be upfront about it because if you do this it will make a real difference on your profits.

If you’re looking for more ideas on pricing, or on marketing, give me a call – you can book a call here – I really am very friendly, and really, really good at what I do!

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