Is your business trapped in a price war?

How to stop competing on price?

If your only selling point is that you do great work, you are forcing your clients to choose you based on the only other metric they understand: the price. Competing on price is a race to the bottom and if you are the cheapest one, you are the most replaceable, as it will always be another business that is willing to do the job cheaper than you.

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Competing on price is a sign your positioning is unclear

If you're forced to lower your price and constantly compete with the cheapest option, the problem may not be your services, but your business positioning - what perception your clients form when they come into contact with your business.

When clients don't understand why they should pay more for the same services offered cheaper elsewhere, even if your services and results are superior, the issue to investigate is positioning. Price reflects a set of factors that begin long before a client sees the number. If, by the time you reveal your price, the client hasn't understood the value your service brings, then price becomes the only basis for comparison between two businesses offering similar services.

Companies that understand that clients don't buy products or services, but the value behind them - how it changes them, why it matters for them - don't struggle with positioning and their clients don't question their pricing, because they don't compete on pricing, but on meaning: they give their clients a reason to choose them.

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Stop targeting everyone

Narrow your positioning and avoid being everything to everyone. When you call yourself a General construction company, you are, in fact, invisible. For a client, a generalist is a risk, while a specialist is an insurance policy. Clients buy peace of mind, elite craftsmanship and specialized problem-solving; they don't buy labor. To move from invisible to indispensable, you have to pick a lane where your expertise makes the competition irrelevant.

When someone sees your services, they should look like a menu of solutions, grouped by emotional and functional impact to satisfy specific client needs. Group your services by the impact they have on the client’s life.

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Sell the outcome, not the task

As a business owner, you already know that the cheapest offer is often the most expensive mistake. When you talk about your business, try to focus on the risk of failure and explain to your clients what is the cost of doing the same job twice.

Your main goal should be to shift the focus from the cost of the build to the cost of failure. When you help a client understand the price of fixing a job done poorly, your rate stops being an expense and starts being an insurance policy.

Most business owners post a before and after photo and think the marketing job is done. But a photo of a finished project is just showing a task. To connect with a client, you must clearly explain the value you've added.

To do so, try using a Problem - Solution framework. Instead of Just finished this job. Looks great!, move the focus on the client's comfort and the added value Our client needed a home office but couldn't afford to lose a bedroom. By reconfiguring the roof pitch and integrating custom acoustic panelling, we created a sound-proof executive suite that added £50k to the property value.

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Tone of voice

Using industry specific words creates distance instead of connection and confused clients don't buy. Technical specs are facts that everyone has. Your client's language describes the results; yours shouldn't describe the process. Remember that price-cutting is a race to the bottom. If you are the cheapest one, you are the most replaceable. True business growth comes from clarity.

When you clearly define your business's purpose - the reason you do what you do (beyond money, which is simply the fuel to reach that goal) - the necessary decisions and actions start to align. Before setting a price, define the purpose of the service and the value it creates for your client.