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Don’t Fear Price Wars

The “expected” response to a competitor lowering the price is supposed to be either stoic sighing or frantic price lowering of your own, fully expecting the competitor to go even lower a.k.a. “price war”.

Once that starts happening, the only way to win is to have the biggest “war chest” of funds ready, and take the losses until most other competitors give up and leave.

  • The bad news is, you are probably not the one with the most funds or the best lifelines with banks, etc.
  • The good news is, there is absolutely no reason to force you to play that game at all.

Price wars only make good business sense in “saturated markets”, where no one can gain a client until someone else loses a client. When all clients are spoken for and have a seemingly infinite choice of service providers, all of which will serve them equally well, price is the only deciding factor.

However, if it does matter who does the service, if specialization is important to the end result, the situation changes. Would you change your GP or your accountant you knew and trusted for a number of years simply because some alternative service provider got desperate for work enough to lowe r their price? I doubt it.

**When there’s more demand for trusted service than there are people who clients trust, like in your field, price war instigators fall flat on their faces. Your clients trust you, so relax, _smile, and wave.

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