| To compete on price, the prospect has to have heard about your business, and heard about your competition and realize that your price is better. That's a lot of conditions. The bigger struggle is getting the prospect to even know you exist in the first place. One way to compete on price is to find something you could replicate, take their price and quadruple it. By charging 4 times as much, you can spend a lot more on marketing. Sure you'll lose some sales to people who price shop, but that's a small part of the market. It's possible that with four times the marketing budget you could bring in more than four times the number of customers of your competition. I don't know. This might work best where your primary value add is repackaging a scalable service that is mostly offered by others. Maybe you could copy patio11's appointment reminder service, only charge four times as much. There are a lot of businesses in the USA that take appointments... with the higher margins, maybe you can afford to send every one of them a nice packet of information. The approach I take, though, is to do something original. Even if others have done it (and others are trying what we're trying, but nobodies really been successful) I expect we'll do ok because the opportunity is huge and there aren't that many others doing it. But even still, I wouldn't be doing it if I didn't think that I had a really compelling competitive advantage. If the others weren't totally screwing up the opportunity, I'd be a lot less interested. I think github is NOT screwing up their opportunity, and so that might not be a business to try and compete with... but there are lots of ideas... just find something where you can do it better than anyone else, or where you think you have a compelling advantage.... that would be the idea to pursue. Maybe charing four times as much would give you a compelling advantage in marketing, I don't know. But that's the kind of price competition I'd go for.... otherwise, have your own spin and then use that difference to find the part of (a preferably very large) market to get for yourself. |