How to avoid competing on price

“When people can’t see the value in what you’re selling, you’ll always compete on price.”

This number one rule applies to every business. If you’re on that slippery slope of competing on price, or even worse, discounting, then your business’ future is short-lived. Discounting hurts profit margins and is unsustainable in the long-term. What’s worse, it hurts your brand.


What we’ve seen is that over time, discounting erodes brands. It’s a short-term sales strategy that sells more at a lower price, but it’s not sustainable in the longer term. Eventually your customers will expect to pay the lower price, and will hold out until that lower price is offered. This leads to lower profit margins long term. Regular discounting means that price becomes a greater consideration in the purchase decision, and consequently the other brand elements such as quality, authenticity, heritage are more likely to take a backseat.

How to get off the vicious cycle of discounting

To move away from price being a consideration in your customer’s purchase decision, the following steps are crucial. Firstly, your entire brand strategy needs a complete rethink. Go back to the beginning and understand what it was that made you successful in the first place. Look for your greatest competitive advantage in the marketplace and understand how you can capitalise on this through your brand positioning. Identify what makes you unique and what are your greatest strengths. Develop a value proposition that is a simple and succinct statement about the value that you offer your customers.

It’s only when brands aren’t competing on an emotional level does the consumer then need to tap into their logic and try to differentiate between brands based on other factors such as price.

What’s your pricing strategy? It’s worth thinking about…


Author: Angela Penfold, Brand Strategist
20 years’ Brand, Marketing and Communication experience in-house and agency-side across many diverse portfolios, nationally and internationally including Government, FMCG, Finance, Technology, Health, Real Estate, Motor Sport, Travel, Professional Services, Fashion and Utilities. 

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