4

On Twitter recently, a full-time freelancer complained about a part-time freelancer, who also has a full-time job, using a strategy of undercutting the market with overly low-priced proposals for creative projects. She complained that part-time competitors’ pricing strategies were unfairly bringing down client perceptions of market prices.

In any business, competitors in related markets can enter “your” space as an add-on strategy to what they do. Since what you do isn’t a core market for them, they’re often operating from different cost structures and commitments to the market. They may be quite willing to implement low-priced strategies to grab market share at the expense of traditional competitors.

Back in my corporate position in business-to-business transportation, we endured more than a decade of UPS and FedEx, much larger competitors in adjacent markets, serving a large, profitable portion of our market  through implementing new pricing strategies. Our company, tied down by various real and perceived roadblocks, never delivered a shot across the bow to let UPS and FedEx know they weren’t welcome in our market. Ironically, both competitors eventually entered the market using a more traditional strategy with some successes, but many challenges.

9 Strategy Ideas You Could Try

If part-time competitors are wreaking havoc in your market with low-priced products and services, here are 9 strategy ideas to protect your overall competitive position and make it harder for them to compete:

1. Identify where you can be a part-time player, employing a strategy to disrupt that market and grow your business.

2. Dramatically change your processes and cost structure to compete at a lower price.

3. Since your core market is your full-time focus, compete through some combination of greater responsiveness, sharper focus, being smarter about what you do, offering better quality, and/or providing better overall value.

4. Offer more options as a way to showcase your specialization.

5. Provide questions a potential customer should ask and get answered to ensure a low priced part-timer is a legitimate provider.

6. Offer an introductory promotional price in exchange for a longer-term commitment.

7. Develop other revenue streams which subsidize your primary market.

8. Buy and re-sell the part timer’s service to more price-sensitive customers.

9. Offer a satisfaction guarantee on the part-time competitor’s work. If a customer isn’t happy with the part-timers work, offer a discount to “fix” it.

What Are Your Strategy Ideas?

Are you facing low-priced, part-time competitors? What strategy ideas  are working or not working for you in dealing with them? - Mike Brown


The Brainzooming Group helps make smart organizations more successful by rapidly expanding their strategic options and creating innovative plans they can efficiently implement. Email us at brainzooming@gmail.com or call us at 816-509-5320 to see how we can help you devise a successful innovation strategy for your organization.

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Mike Brown

Founder of The Brainzooming Group, and an expert on strategy, creativity, and innovation. Mike is a frequent speaker on innovation, strategic thinking, and social media.

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4 Responses to “9 Strategy Ideas to Deal with Low-Priced, Part-Time Competitors”

  1. Karen says:

    In item 8 are you suggesting hiring the part timer for my company? I have been pondering that of late as a way to expand. In my business, there are many part timers that charge ridiculously low prices!

    • Anonymous says:

      That’s exactly what I’m suggesting Karen. If someone is providing a ridiculously great value, maybe the best course of action is to take advantage of it in your own business. It may be non-traditional, but it’s smart to at least consider it. When we were contending with UPS and FedEx and apparently unable to retaliate by getting into the parcel business, I suggested we simply buy a position in one of the companies as a way to participate in that market financially since we couldn’t seem to operationally. The idea was pretty much dead on arrival with the management team, but it’s another version of “if you can’t beat them, join them.”

      BTW – thanks for the typo spotting!

  2. Anonymous says:

    A couple of valuable clarifications came in via other channels I wanted to share:

    Beth McKeown (@skionski) asked on Twitter “From your post – “Provide questions a potential customer should ask…” How do I do this without looking skeezy?” My response was “You could supply the ?s w/ ur answers to demonstrate ur credentials. Gently imply any provider should be able to answer this.”

    Also, good friend Chuck Dymer offered a wonderful example of how you can use disruptive technology as another strategy. He cited how Barnes & Noble and Borders leveled small booksellers through low prices and broader product selections. Amazon than introduced the Kindle (a disruptive technology) to push Borders to the brink, with Barnes & Noble hanging on for dear life thanks to the Nook – its response to the Kindle.

Trackbacks/Pingbacks

  1. Pricing Negotiation Strategy Lessons from "Pawn Stars" | The Brainzooming Group | Strategy Consulting and Strategic Planning - July 7, 2011

    [...] After yesterday’s post on low-priced, part-time competitors wrapped, I was searching Sunday for a reality TV show marathon to supply potential blog content on strategy or creativity. I watched several hours of a “Pawn Stars” marathon on the History Channel and got a big dose of pricing negotiating strategy lessons. Thanks to frequent promos, I learned this reality TV show about a Las Vegas pawn shop run by Rick Harrison and his family is the number one show on cable TV. Who knew? [...]

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