By Jo van Vuuren — Fractional CMO
You stand out from a cheaper competitor by refusing to compete on price at all. Instead, you get sharply clear about who you are the best choice for, and why that is worth more to them than the lowest number on the page.
Why does competing on price alone rarely work?
There is always someone willing to charge less than you. Undercutting them means undercutting yourself, and the moment you win business purely on price, you have taught that customer that price is the only thing that matters, so they will leave the moment someone cheaper appears. It becomes a race to the bottom, and the only guaranteed winner is whoever is most willing to work for next to nothing.
What can you compete on instead of price?
Customers rarely buy on price alone, even when they claim to. They buy on a mix of trust, speed, expertise, service and fit. Your job is to work out which of those you can genuinely deliver better than a cheaper alternative, and make that the reason people choose you.
- Specialist knowledge a generalist competitor simply does not have
- Reliability: turning up, delivering on time, doing what you said you would
- A better experience of working with you, from first enquiry to delivery
- Results a cheaper option is not set up to achieve
- A specific problem you solve that broader competitors treat as an afterthought
How do you get clear about who you are best for?
Trying to appeal to everyone is exactly what pushes businesses into competing on price, because a generic offer only has price left to compete on. Get specific about the customer you serve best (their situation, their problem, what they care about) and speak directly to them. A cheaper generalist cannot easily copy a specific answer to a specific problem, because copying it would mean taking on the customers who do not have that problem too.
This will put some people off. That is the point. The customers who are not your best fit will go elsewhere anyway, usually to the cheapest option, and that is fine: they were never going to pay for what makes you worth choosing.
What is the risk of chasing the race to the bottom?
Cutting your price to match a cheaper competitor rarely stops there. Margins shrink, service quality slips because there is less time and budget per customer, and you end up resenting the very customers who only ever cared about price. Meanwhile, the competitors who stayed clear about their value keep charging what they are worth. Standing out on something other than price protects your margins and your energy as well as your positioning.
How do you put this into practice?
Start by writing down, honestly, why your best customers (not your cheapest, your best) actually chose you and stayed. That answer is usually not price. Say that reason clearly and consistently everywhere a prospective customer meets you: your website, your sales conversations, your proposals. Then stop apologising for not being the cheapest option in the room.
Common questions
How do I compete with a cheaper competitor?
By competing on something other than price (speed, expertise, reliability, results or a better experience) and being clear about who values that enough to pay for it.
Should I lower my prices to match competitors?
Usually not. Matching a cheaper competitor on price teaches customers to choose on price alone, which starts a race to the bottom that squeezes your margins without earning real loyalty.
What if I genuinely have no unique selling point?
Most businesses have one and have not said it clearly. Ask your best customers why they actually chose and stayed with you: the honest answer is usually your starting point.
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