How do you fight a price war?

The Tariff War in Our Talking History

How do you fight a price war? – At Bikeroger, we run and avoid it at all cost. This is because we know that it’s going to be a lose-lose situation for both retailers. Unless, you are huge capital or have a cost advantage against your competitor.

For example, Walmart is one who practiced low cost leadership strategy extremely well.

But what if you are a startup or a new business in town with limited budget?

Here’s a situation Bikeroger faced a few weeks ago.

We posted up a picture of cycling jerseys up for sale at S$49 on our facebook page. Response was good and managed to have quite a bit of conversions. Customer Troy came and posted about our competitors pricing, which was lower.

Now at this point, if you were the community manager what would you do?

A few things I can think of.

  1. You can lower you price – but there’s nothing more frustrating than being constantly forced to lower your price simply in order to make a sale.
  2. You can bluffed – says that the quality of you stuff is better knowing that it’s not true because you are selling identical items
  3. You can be honest – simply share with your customers that your cost structure wasn’t competitive enough (Be truthful)
  4. You can remain silent and not reply to the comment – but mind you this is facebook, not replying means bad

We went for 3 (be truthful) because we know transparency is the best especially in retailing because if you lied and got find out it would be whole lot worst. I sincerely thank Troy for his comment because without him I would have thought our pricing was competitive. I also shared with him that we are not able to compete on that pricing and how we actually compete in terms of service.

True customers WANT to spend money with you… True customers also understand that you have a business to run here, with bills & salaries to pay – adill (founder of woothemes)

And reading the book “delivering happiness“ by Tony Hsieh. I learn a lot on how customer service makes a different in retailing, especially for an e-commerce site like Bikeroger (Timbuk2 did the same thing to me)

So beside services how else would you suggest to compete in a price war? Love to discuss

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2 thoughts on “How do you fight a price war?

    1. Yeah man. agreed. Like what timbuk 2 did to me.

      Competing in terms of service is intangible, it’s hard to put a price down to service. This gives us an advantage against others especially those big firms who lost track of their services and only think of prices 😀

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