Issue link: http://psai.uberflip.com/i/1164957
W EEKLY EDITION SEPTEMBER 11, 2019 Pri ce W ar s: Don't be Tak en Pri soner Par t I By Karleen Kos, PSAI Executive Director Id e n t if y i n g r e s o u rc e s to b at tl e a p o te n t i al p ri c e w a r. Thoughtful investigation of your competitor's actions will lead you to a more precise conclusion about what is happe ning in your market. That, in and of itself, is a good share of creating a more productive course of forward movement than succumbing to a price war. In order to decide what to do next, you'll need to recognize the options you can consider for pricing give n the trends in your market overall, your competitors' actions, and resources available to both of you. • Leverage Customers' Sensitivity to Price . A thoughtful evaluation of customers and their pricing concerns can provide valuable knowledge about whether one should respond to a competitor's price reductions with a similar strategy or with some other tactic. Customer decision - makers are often not aware of the portable sanitation options available in terms of equipment choices, service intervals, and other amenities, so they don't know what substitutions are possible. They may also find it difficult to make comparisons between what your competitor is offering vis - à - vis what you are offering. It's also possible they aren't tuned into portable sanitation and j ust don't want to take the time to get into the details. In that case, price is the easiest way for them to make a decision. That desire for simplicity is what the competitor who wants to win based on price will leverage to get the contract. If you aren' t the low - cost option, you can compete by finding a way to make your prices simple too. Remember when McDonald's had its dollar menu? It wasn't too long before Wendy's came out with its "4 for $4 menu." The Wendy's prices were still higher, but their prici ng was simple too, and customers responded. On the other hand, many customers are more concerned about quality than price, for a variety of reasons. If you can talk to the right people, you'll find that many clients are willing to pay more for on - time deli very and ongoing service. They need those things to make their job sites run smoother. You can thus sell your higher priced services as a solution to their sensible concern that poor restroom experiences will cause worker morale to go down, endanger health , and possibly create permit violations. • Leverage Your Company's Unique Abilities. Big companies bring with them a lot of resources that often make it more possible for them to legitimately reduce costs. They have economies of scale and more cash flow tha n smaller firms. That's just reality. On the other hand, they often have more trouble being nimble. There are layers of bureaucracy and decision - making that make them less able to respond to individual customer needs than a smaller company where the whole team fits around a single table. P AGE 9 CONTINUED ON PAGE 1 0