WEEKLY EDITION SEPTEMBER 18, 2019
So You' re i n a Pr ice Wa r: N ow W hat ? (Part II of a series)
By Karleen Kos, PSAI Executive Director
Competition happens — there's nothing you can do about that. They are going to try to win business,
and it might come at your expense. That's just reality. But you're running your company, not theirs. To
survive and thrive, you have to make adjustments to what is happening in your market, leveraging all
the assets of your own situation to neutralize the impact of their activities. If you do it well, you may
even rise above them to create a new version of your company. So how do you do that?
In short, don't panic. Diagnose. Before you can decide what to do when a competitor starts offering
lower prices, you must first take the time to understand the symptoms that are present in your market.
There are four main things you want to look at.
Customer issues. In any price war, the main focus should always be the customers. Without a good
handle on what makes them tick in your market, you'll be entering the price war with one boot off.
Particularly look at your existing customers. How happy and loyal are they? How good is your
relationship with them, and how price sensitive are they?
If you have customers that have been with you for years and they are happy with your service, if you
know the decision-makers personally, and if you've worked together on many projects to the mutual
benefit of both your firms, you are in a strong position. In effect, you're holding a good hand at cards,
and the only one your competitor has is price. If your customers are predominantly short-timers, if they
balk at every minor price increase, and if they frequently complain about the equipment or service you
provide, your position is weaker. They will probably be willing to talk to a competitor, and not just
because of price.
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