Price Undercutting and Your Competition

Loren Petrowskiask LorenLeave a Comment

I often hear a lot of talk about (mostly) newbies and not so new vendors offering super low prices or doing dramatic cuts in their pricing to drive business their way.  If you have experienced this and it is upsetting to you, think about the two different scenarios and why it is frustrating.  First, the newbie:

They are new to the business and offering a lower rate.  Ok, when you were new to the business, no doubt you were offering lower rates too.

  • Are they marketing themselves better than you?
  • Are they selling to couples who you think would be your clients?
  • Are they providing good value for their services?

First of all, if they are hustling and getting out there and getting clients, good for them.  Clients don’t only book on price, weddings is very strongly a people business and if they don’t connect with you, they will very often, not book.  On the flip side, if the deciding factor for booking is a budget product or service, maybe they were not your target client to begin with?  The final question, “are they providing good value for their services?.”  Now I’ve heard of people saying “oh that vendor is charging $xyz for this and that” but if the clients are happy, then that’s all that matters.  They are serving their niche and you need to serve yours.

The next group are the vendors who have been around a bit who, for whatever reason have dropped their rates.  You never know what would lead to this–it could be a really bad review that caused a slowdown in business, it may be an emergency at home where they need the money.  Who knows?

Is this upsetting because:

  • You financially cannot compete at the lower price point?
  • You feel like they are devaluing the industry?
  • You know they have cut their offerings (along with their packages)
  • You are wondering if going back years in pricing is the only way to get business?

Now is the time to really evaluate things in your own business.  Are you providing the absolute best in service and value to your clients and your current pricing? How are you continuing to stay relevant in the industry? How are you showing potential clients that you are worth what you are charging?  If you are in the higher end range, clients  will continue to hire you or your direct competition, it’s just a matter of who.  It’s like whether or not they will purchase Chanel or Hermes.  If you are in the middle to lower price range then it gets fuzzy as clients often want the look/services of the higher priced vendors but either can’t or won’t pay for it.  These clients also may not be able to tell the quality from one service or product to another and this is where you need to see if they are truly your client and if you want them to be your client or not.

Remember, your sales process starts long before they make contact with you.   This would be whatever you put out there on your website and social media.  The meeting is where you BOTH decide if you are a good fit for each other, how much you want the business and how well you sell yourself.  By the time you get to a face to face meeting with the clients, often times these clients have already researched you and formed an opinion about you.  They may have additional input through friends, referrals or other resources, but if all things are the same, you and your competition may be working only off of your website and social media presence to start.

By looking at your website and social media, are you providing value and service to your audience? There is a quick free resource called Peek by User Testing where someone will look at your website and give you a free five minute review of your site.  This is a cool tool that you can use just to see what people not in your industry are thinking about your site, especially since your potential clients are new to the wedding experience.

 

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