Our sales are falling and I might have to lower prices!

Dear Aunty B,

Our sales are falling and it’s hard to work out exactly why. I am hearing that it’s not the economy because other companies in our sector are doing ok.

I have a great sales team and our clients are spending. The one thing I can put it down to is that my competitors are copying every little thing we do and at cheaper prices. I don’t want to lower my prices, but think I might have to!

Any tips?

Victoria

 

Dear Any Tips,

Yours is a classic story. You sound like you were out of the gates first and were leading the market in your niche with a great idea. (Well, I know you were, because you were one of our StartupSmart award winners.)

But then the copycats moved in. Low barriers to entry meant it didn’t cost them an arm and a leg to take market share.

You have failed to do a couple of things: you haven’t kept innovating to stay ahead of the pack and you haven’t focused on building customer loyalty so that existing customers keep buying from you.

The fact you must face is you have become a “me too” business and therefore you are competing on price, which is a dangerous place to be.

You need a major strategic rethink, an innovation overhaul and a big focus on building barriers to entry. Back to the drawing board, my friend. And don’t despair, you are an entrepreneur and this is where you shine!

 

Be smart,

Your Aunty B

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