It is your worst nightmare. You’ve priced everything from planning to delivery, picked a price that is competitive but which still returns a reasonable profit, perhaps a little above your baseline to allow for ‘specials’, and your email marketing campaign is about to go live when you are undercut by a similar item from your major competitor.
There is a temptation, although one to be resisted, to cut your price to the same level or, perhaps in a moment of desperation, a bit lower. As a one-off this might be productive as it will hurt the other company, but it is hardly a good business model.
The old saying is true: the best way to deal with a price war is not to take part in one. If you’ve picked a price that you are happy with then there are other ways to tempt your subscribers to pick your product over the cheaper one.
If the other company is making a profit on a lower price then they may have cut corners. Check through the customer reviews and try and find a common criticism. Potential customers will do this. Perhaps some have complained about damage in transit, or even highlighted having to ask the company to replace such an item. I don’t have to point out the cost of robust packaging. If your product is wrapped securely highlight it and perhaps even show an image of the product being opened.
You can, for instance, play on likely concerns. People can be wary of the cheaper item. They can have the feeling that if they pay £101 for something worth £100 they have wasted £1. If they pay £99 for it, they might well have wasted £99.
If the rival product has been subject of trimming of manufacturing costs, discover how they have gone about it. If you find flimsy casing, some essential extras missing, a lower quality of electronics, then you will immediately know what to highlight about your product.
One way to destroy all the words about quality is to have an inferior design of marketing email. With free email marketing templates there is no excuse for ugly. You should also use high quality images. A cheap stock image, especially one which is not totally relevant, shows a lack of care.
People will pay more for a product if they feel it says something about them. What’s so great about an iPhone? Discover what people want from the item you are selling, provide it and tell them you have.
Highlight those points where your item scores against your competitor in the email. Bullet lists are good, as long as they are not too long. Putting the major feature as the first item has long been regarded as the best slot. However, separating that feature is a better way. Make it special, make it stand out.
Remember too that different people will be attracted by different aspects of any item, or any person come to that. Section your email marketing list.
A price war requires a response, but don’t be tempted to slash prices. There are other ways to win.