UNDERSTANDING SALES COMPETITION

Is sales competition driving your prices down? Sometimes the “knee jerk” reaction price competition is to price match for fear of losing a sale.

Did you know..?

If your current Gross Profit Margin percentage is say 30% and you reduce your price by 5% to match a competitor, sales of that product must increase by 20% just to break even.

In some cases there is a valid reason for reducing your price, but do you really have to match you competitor?

• By price matching, how have you differentiated yourself from your opposition?

• Do you offer better service?

• Do you offer better warranties?

• Do you offer a better product?

If you answered YES to any of these questions, think seriously about matching a competitor’s price, and rather sell the benefits of doing business with you at the higher price. But if all else fails and you need to reduce your price – negotiate!