There’s a saying: “Don’t compete on price”. You may have heard it a lot, and still not quite grasp exactly what it means. If we don’t have a full understanding of what “not competing on price” really means, then we are sure to shoot ourselves in the foot.
“Competing on price” is defined as one or more of the following:
- Price is the only factor used in decision making for a product or service
- Price is considered more important than other factors when choosing a product or service
- Few if any other decision-making factors are even mentioned by us
How this looks in a marketing campaign is:
- “Get 2 rooms cleaned for $50”
- “We offer the lowest cleaning rates in town, and do a pretty good job at it”
- “Saving money is all that matters – call us today!”
So what’s wrong with competing on price anyway? What’s wrong with offering services that are affordable? Absolutely nothing – it’s when we offer cost savings at the expense of other things are important too that’s the problem. You might only spend $50 with company A to clean 2 rooms of your house, but they were late showing up, making you late for work, they didn’t do a great job, and you ended up having to reclean it yourself. You wasted $50, and it cost you a late-show at your own job. It’s these too-low-to-be-good prices that are really more expensive in the end.
What should you compete on if not price? Here are 10 things that are better for any company, in any city, in any economy to compete on than price:
- QUALITY: we do an excellent job cleaning your home
- QUALITY: because our staff is paid a living-wage, they are better able to go above and beyond what’s expected in your home
- COMMUNICATION: every specific request for your home is implemented and any question is answered before we begin
- COMMUNICATION: email, text, phone calls to the office and your cleaner any time clarity is needed
- AVAILABILITY: we have a large enough staff that even most short-notice requests can be met
- AVAILABILITY: if necessary, we can clean on the weekend or at night, with a shift-differential
- TRUSTWORTHINESS: we leave all properties securely locked and armed as appropriate
- TRUSTWORTHINESS: any problem, no matter how small, is communicated immediately to you and the manager
- RELIABLE: we arrive within our timeframes each visit, and return when we say we will
- RELIABLE: if we say we will do certain tasks for you, rest assured we will do them
The bottom line reason why you never want to compete on price is this: you will forever be justifying your price if you do. And if you are a professional cleaner, you will have business costs that need covering that non-professionals don’t. And you can never compete with someone who isn’t playing by the rules. You don’t want to anyway.
There are some sneaky ways we end up competing on price, even if we don’t mean to. Read this article to learn more.