Competing in price wars. Is it really worth it?

Competing in price wars. Is it really worth it?

Being the cheapest doesn't mean you're the best!

Is it cheap and cheerful that people are after? Sometimes, maybe it is. At least that's how Poundland approach the world of business. Some of their products are more expensive than they're worth it turns out. Shampoo, for instance, which can be bought from a local shop which I know for 86p. On the other hand, though, they're a lot cheaper for other market-like products, such as their DIY tools. But is it really worth it buying a screwdriver that's going to be handleless after a couple of uses? To back this up, my friend bought one once...the next day the handle dropped off! Just like that, for no apparent reason. He didn't apply more pressure to it than he did any other screwdriver, and they didn't have their handles drop off. So, there is some truth to this.

Now, I'm by no means suggesting that being cheap and cheerful is bad. After all, Poundland are a very successful company! So it would be a lie if I were to suggest such things. However, what I am trying to point out is that it's not always worth it to be the cheapest. A lot of large companies can afford to be cheap. It sounds funny to say this, but it's true. They can afford to buy things in such large numbers that they get bulk discounts. They can then afford to sell each individual product for less than you, who bought perhaps a small pack of 100, and didn't get such a large bulk discount. Get my point?

To compete against the prices of a large wholesale company could be suicide. If you try to sell your products for less than they are, yet you're paying more than they are, then how on earth are you going to make profit? It's not even worth trying, if you ask me.

Perhaps, instead, try something special. Say, for instance, you're selling a mobile phone. The Carphone Warehouse are selling this phone for £59.99 and you are forced to sell the same phone, but for £64.99. You paid, say, £60 for the phone, whereas The Carphone Warehouse may have paid only £55. You're each, in this scenario, charging around £5 more than you paid, but one shop is £5 cheaper than the other. Which are the customers going to buy from? The one that's £5 cheaper, obviously.

Perhaps if you offer your phone without charging the customer any upfront cost. Instead, say, they pay a small weekly payment of £5 for a duration of 15 weeks. That would earn you, in the end, £75. I can tell you that The Carphone Warehouse don't do this. Their idea of no upfront fee with a small regular payment is commonly known as a 24 month contract! Stay clear of those if you possibly can!

Of course, the customer would have to have an acceptable credit status, and it would be your responsibility to carry out credit checks. But they would not have to be subjected to any contract, either for the phone or for the mobile tariff. You could sell a Pay As You Go mobile device, absolutely contract-free, for small weekly payments with no upfront fee. Guess what, this is the Littlewoods touch. And they are one successful company! I use them too, and for that one reason! I don't have to pay the full price upfront. I'd recommend Littlewoods to anyone!

Apart from Littlewoods, however, there are not many reputable companies which offer this. And to compete against the small number that currently do so will be nowhere near as complicated as trying to participate in a price war against a big shopping giant such as Amazon.co.uk.

Customer Service is key!

Customer Service is key!

Be helpful, be supportive, always!

I cannot stress enough just how important customer service is! If you want to get customers, then you're going to need to put yourself out to impress them! It's not just about answering their questions and leaving it at that! It's about being persuasive, and the only way you can "persuade" a person to become your customer is to make them think "Wow! They're good!". Okay, you've answered their question, but go the extra mile and say "Can I help you with anything else?".

And don't be lazy! If you get a request for help, but you're in the middle of watching a fascinating TV program, sacrifice the TV program and go and help your customer! Don't procrastinate in other words. Customers don't like waiting, and when they're made to wait they start to lose interest, rapidly. This especially applies to the particularly impatient customers, such as myself. You can, after all, catch up on that TV program at a later date. They'll likely show it again anyway, but there are always services such as the BBC iPlayer where you can watch bygone shows. You cannot catch up on a customer you lost because you were too lazy to assist them!

Providing 24 hour support is not always possible, especially if you're new and have little staff. But as well as being demanding, customers are also very fair. They will understand your situation and won't expect you to provide 24 hour support to start with. So long as they get a reasonable standard of customer service from you they'll be content with that. But you must be reasonable! If you really don't have enough time on your hands then don't bother starting your own company! Not unless you can afford the staff to take care of the customer service for you, which believe me, can be costly.

Running a business without first understanding the principles of maintaining it is like walking into the Dragon's Den with a cardboard box on your head! It simply doesn't work!

What do customers want?

What do customers want?

Is your product sellable, and why YOUR product?

Before you try to sell any product you need to ask yourself "is it sellable?".

There's not much point trying to sell a product that nobody wants, because nobody will buy it! Perhaps look into conducting a few friendly surveys to gather information. If you ask the right questions you'll get the answers you're looking for. But choose your words carefully. Answering surveys can be a bore! Make them short, perhaps even offer a small reward for completing it...just make it "bearable" for people to complete your survey.

1. Find out where they live so you can determine which parts of the target area are more likely to generate sales. Use the information gathered to raise the budget for ads in those areas, and lower the budget perhaps for ads in the other areas.

2. Find out their age so you can determine which age groups are most likely to buy your product. Use this information to target the appropriate audience via the appropriate means. To give you a rough example, I find that younger people prefer bangs and explosions and lots of flashing imagery in high definition, whereas the older generation cover their ears to this kind of material (my gran, for one, bless her!)

3. Find out what they're interested in. If you're trying, for example, to market a new type of computer game you're probably looking for people who are interested in video games. You need to filter the good from the bad, so to speak. Otherwise you could end up wasting bucket loads of cash on advertising to the wrong sort of people, and end up generating next to no sales. But be thorough with your search for information! Don't just ask "Do you like computer games?", rather find out what type, or genre of computer games they like to play. If you're a sporty person and only like to play sports games you're not really going to go out and buy the latest Call of Duty, are you?

If, in the case, there is a market for your product then brilliant! But you may not be alone! If you are providing a unique product, then superb! But if you're up against competition, then you still have another war to fight and you're going to need a battle plan! Why should people choose YOUR product over someone else's? What's so special about your product? What can you do, or what can you do BETTER than everyone else?

This is where it's always good to do a little undercover digging. I often found myself casually browsing around the competition, pretending I was a potential customer. I wasn't really interested in their product, as it's not the product itself I'm worried about any more (by this stage, I'd already established that my product was sellable). No, I was more interested in how they were selling that product to me. I would pretend to know absolutely nothing about the product and I'd get them to answer all my questions. I wanted to test their knowledge and ability to provide the customer service a customer requires. Some were better than others! Which narrowed down my competition.

The competition was now getting tougher. I had to, somehow, find a way to beat my rivals. Rivals who were just as good as myself at providing the support a customer requires, as well as provided the same product as me, and who even had an extra advantage over me...they'd been in the market longer. This was really tough for me, and at times I thought it was impossible and maybe I should just give up. I mean, competing against them on price would be suicide!

Here are some tips that you could try. Just give them a go, maybe they'd work for you.

1. Perhaps offer Free Home Delivery with your product, possibly even Same Day delivery? Many places offer Next Day delivery but only a small handful in comparison deliver the same day. If you can't afford to do this, don't worry, as it can be a costly investment. However, budget permitting, it'll sure gain you some repute.

2. Offer customised support. If you've sold a product that's faulty, for instance, arrange to go to their home and see what you can do to help without charging them extra. This can be costly, especially if you have to pay the cost of petrol, but risks sometimes have to be taken. So long as you have a reliable business plan and have planned your budget properly, you could easily find a way to fit this service in. Because, let me tell you, the customers love it! And quite a lot, in fact, are prepared to pay more for a product which includes such a great service. If the customer is happy then they will return, and it is likely that they will also bring friends when they do. It's an investment well worth considering.

From my experience, it's the after-sales support which brings a lot of companies to their knees. They're all glittering in the spotlight when it comes to advertising and making money, but they care a lot less for maintaining a high standard of service after the sale has taken place. I'm not saying this is always the case. But, from experience, it happens a lot.

If you manage to maintain, not just achieve, but keep on achieving a high standard of service, then there's no doubt you'll do well. If you try to care more about satisfying people than trying to make money from them, you'll soon find that the people you're satisfying bring in the money anyway! Effectively, you end up killing two birds with one stone!

How to Get Customers to your Web Hosting business

How to Get Customers to your Web Hosting business

Are you finding it hard to get customers to buy web hosting from you?

First of all, let me start by pointing out that the web hosting industry is probably one of the tightest and most heavily populated industries to compete in. There are literally millions of web hosting companies out there, with hundreds, maybe even thousands more starting up each year. How can you expect to compete in such a popular market? Well, don't get disheartened, because you can! I've done it, my friends have done it, and I'm sure many other companies have done it too!

It is, however, safe to say that it's not an easy task. You have to work at it, and keep working at it, no matter how long it takes. Becoming a successful web hosting business does not happen overnight, and you mustn't have the attitude where "if it's not making profit within the first month then it's a complete and utter waste of my time". Because it's not! With time comes trust. Ask yourself would you buy web hosting from a company that's just started? Or would you pay that little bit more to buy web hosting from a company that's been in the industry and already has some reviews to back them up?

This may sound to you, now, like there's no chance of success! You're up against competition that's already popular and successful in the public eye. I assume this, because that's exactly how I felt! But you're wrong! I was wrong! There are so many ways and means by which you can convert the public opinion and make them buy your services, even if that means breaking their routine. People are human beings! We tend to find a particular service we like and stick with it. I mean...why change? Why go to all that trouble when we can stay, nice and snug, in our own little box? Do you get what I'm saying?

This is true even to the point where you offer a potential customer free web hosting services just to try your company out. Maybe by trying your services they'd be willing to stay on and buy? The word "free" sure sounds inviting, but they're still not convinced! I remember when I was trying this technique. Yes, I got some sign-ups, but never from people who already had a website. Rather, I got people who had little-to-no-money, or were inexperienced and just wanted somewhere to test out their webmaster skills without having to pay first, or were looking for a place to host their illegal material. Truth be told I ended up removing more than half of my free sign ups for one or tother breach of my terms of service. In the end I had to ask myself whether it was really worth it? I was hoping to attract customers to try my free services with the likely possibility that they'd become paying customers soon afterwards. This wasn't the case. Pretty much anyone who seeks free web hosting is seeking it because they either have no money or know that they're likely to get banned anyway and don't want to waste money in the process. I couldn't stop wondering why my target audience were not taking me up on my offer of "try before you buy", and why they still preferred to stick with their existing provider and pay, sometimes, up to twice the price.

It later occurred to me that the answer was quite obvious. I was new, had no reviews to back me up, and all I was doing was advertising. You're not exactly going to say "Oh, I'm an awful web hosting provider, do not buy hosting from me!" in your advert, are you? No, you're going to say how wonderful you are. To the customer this is just plain words with absolutely no meaning behind them. So how do you fix this? How do you earn their trust when you can't even convince them to try you out? If it's reviews they're after, you're not going to get any of them without getting some customers first. So, forget about reviews right now! Getting reviews isn't the solution to this problem! You still need that first customer!

It may sound funny to say this, but the solution that worked for me was helping others! Register on some forums that discuss webmaster, preferably even web hosting related topics. Forums such as Digital Point Forums, Hosting Discussion, V7N Webmaster Forums, are a good place to start. I would not recommend Web Hosting Talk, however, as the community there are already far ahead of you at this stage. They don't need your help, and they tend to get rude when you try to give it.

I even joined as staff with a couple of my rival companies. I never took a marketing role for them for reasons that should be obvious. But I actively engaged in providing customer support to their customers. I used to get 5 star ratings from a lot of them as I always worked hard to help them, no matter how long it took me or how complex the problem was. By working for these companies I was not intending on stealing their customers as that would destroy everything I'd worked so hard for. No, I did this so that people would know me, would know MY name, and would know me as "Yeah, that guy really does know what he's doing and he's really helpful". And seeing that, at this stage, I had no customers of my own to support, it proved to be a very constructive way of spending my time. Why don't you try doing the same thing?

The power of speech is really quite amazing. It's amazing what "words" can achieve. If you manage, somewhere along the line, to impress people they will spread the word about you. It wasn't my web hosting company they were speaking about, it was me! And who was I? The owner of my company! Voila, there you have it! Customers were signing up to MY company because I was working there. Maybe I'd previously helped that person when I was working for one of my rival companies (which I'd since stopped working for so I could spend more time with my own, now developing company), or perhaps they were merely a friend or acquaintance of someone who I'd helped out in the past. Either way, they wanted MY services, and I was more than happy to give it to them! All in all, a job well done! It finally felt like all my hard work had paid off.

I really hope that this story of mine will prove most intuitive. I hope it motivates you to emerge from the cave of frustration you lock yourself into (I know how that feels!). Be positive! Be helpful! Be the best! If it can work for me, it can work for you!

You just have to put the effort in. Good luck people!