4 Proven Strategies For Fighting Price-Cutting Competitors

Nothing is more discouraging than having a key account sheepishly admit that they have switched their business to a competitor. They might justify the move by explaining there was no problem with your service — it was merely a price issue! After spending years developing an account, building relationships, working hard at meeting their needs, it is extremely frustrating to lose business in that manner.
 
There are, however, several ways to protect your good accounts from the competition:
 
Strategy #1: Deepen your personal relationships with the key decision makers.
 
Focus on turning the key decision makers into your friends. Make it a point to develop personal relationships by spending time with them socially … outside the work environment.
 
Arrange to have them meet your spouse and family. Get to know them more deeply than you normally would. These efforts are never wasted. As the relationship grows, the natural tendency to keep doing business with you grows proportionately.
 
Strategy #2: Shore up any weaknesses that may exist in the account.
 
Make sure you take care of any lingering service-type issues that could serve as an opening for the competition. Overdue invoice problems, ignored back orders, promises made that haven’t been kept — all these are potential weaknesses for your competition. So clean them up.
 
Another weakness has to do with your keeping the account up to date on the latest products and services. Always communicate the options to your key clients. Possibly the weakness to be most concerned about, however, is pricing. If this is a good account, they probably have been doing business with you for some time. And, since they have, it's entirely possible that you've allowed the prices on some products to rise above market levels.
 
If so, that can be a weakness if your competition decides to attack it. You may be better served in the long run to discretely and strategically alter your prices on some items.
 
Strategy #3: Hold regularly scheduled business-checkups.
 
Schedule a lunch together at least twice a year with each client for a business review. This will establish you in the minds of your customers as a cut above other vendors. When you are willing to measure and disclose your performance, and to talk frankly about the business relationship, you become more like a consultant than a vendor in the eyes of the customer.
 
Strategy #4: Offer options.
 
Depending on the situation, it may be beneficial to propose contract options to your good accounts. There are a couple of ways to approach this. If this is a cash client, you could agree to work with them on a barter basis for any business above and beyond the previous year's purchases. The other strategy is to rebate some percentage (normally 3% to 5%) of the additional business.

These options not only encourage customers to work with you on finding additional opportunities, but they also strengthen the business relationship you have with them. By using these strategies you will have enhanced your ability to protect your valuable accounts from the competition. And, it's always easier to prevent the loss of business than it is to regain it after the fact.