Understand Your Buyer > How To Convert > The Price Match Effect
What is it?
The Price Match Effect is the act of literally matching your competitor’s price to seal the deal.
Why does it work?
It works because often price is the only differentiating factor for buyers – especially in crowded or commoditised marketplaces. Differentiating on price is ill-advised as it not only eats into profit margins, it also attracts buyers who are only price loyal. That said, sometimes if you want to secure a deal or show some “goodwill” to secure a client with a potentially higher lifetime value, then matching the price is something in your arsenal. It’s not just for high street retailers and online shops.
How can you use it?
You can use this in two ways. The first is to publicise in your messaging the fact that you will “match or beat any quote” or that you “won’t be beaten on price”. This will raise awareness to potential buyers but may damage your ability to maintain margins and focus on value over price- you are commoditising your offering but it will drive sales.
The second is to use it as a closing tool. When you are in negotiation with a client you can offer to match a price “unexpectedly” to ensure you don’t lose the business purely on cost. This can be more beneficial as you appear to be extending goodwill and favour to the client rather than trying to be the “cheapest” in the marketplace.