You're facing a competitor with a lower-priced product. How do you refine your product positioning strategy?

Price is the blunt weapon of choice for most new market entrants and the entrepreneurial cure-all for value-gaps. In addition to assessing and weaponizing the gaps between you and your competitor's products, this is a great time for value reflection. If low-priced entrants are entering your space, it means that you've become big enough to become a target. Congrats! But has your offering matured with the market or is the entrant an indication that you've lost touch? This competitive wakeup call may be just what you need to look at your total offering to move your product to the next level and make the upstart look cheap and immature. This will allow you to position their price as risk, not reward.

One way to get started is to use surveys and other voice-of-the-customer techniques to ask clients about the perceived value of your product and the competitor’s products. Based on this feedback, conduct an analysis to identify the primary benefit that affects price variance and determine where your product falls in relationship to the expected price/benefit trade-off. If there are other critical secondary benefits and differentiators that justify a higher price, be sure that they are clearly articulated in value proposition messaging. Value-based pricing works if the product marketing messages are clear and they target the right prospects.

Look at the features your product has and upsell each of their values starting from the competitors prices. Simple. Assume the customer is going to pay base, and justify the increase with your xtra features.

Many times people don't compare apples to apples. It is important to understand what the needs are of the customer. Do they need the info / product or are they checking a box? I've heard it said many times you never get all three: quality, low cost, & quick turnaround. You can only choose 2. Find out what is important to the client then decide if your product is a fit or not.

Focus on the unique value your product offers that justifies its higher price. Highlight features, quality, or benefits that set you apart. If you can't win with product differentiation, then suggest identifying and focus on a different customer segment that prioritizes quality, features, or brand reputation over price.

Sometimes your product may not be the best fit. Learn to disqualify customers and the sooner you can learn how to do that the better. Say things like "looks like we aren't a fit today, but maybe we will be down the road. I'll check back in after a couple of months." Move on because there are people that need and want your product today.

It's never a good idea to get into a price war with your competitor. Remember that lower-priced products will always enter your market. Instead of taking a drastic step to lower the price, consider: Does your product satisfy the needs of your target audience? Does the product's value justify the cost? What more can you offer to your customer that your competitor is not? Once you have the answers to these questions, you can recreate your marketing messages to align with your new strategy.

Take a closer look at your target audience. Not everyone is solely motivated by price. Some customers prioritize quality, reliability, or advanced features. By understanding these different segments, you can craft messages that resonate with those willing to pay a premium for certain benefits.

Value, value, value - Take the time you need to truly understand their needs and what they find valuable. Interviews, surveys, focus groups, and the like can give you all this information - People are willing to pay for something if it brings them value. Don't sell yourself/your product short.

Quality is not just about "better technology" (whatever that means) - there is also the factor of convenience, pragmatism, and maintenance. For example, maybe the cheaper solution does "one thing", but you do two or three things (which the customer also wants). Bam. Your solution is more convenient and likely cheaper than buying 2 or 3x solutions. Another example, your product deployment and maintenance is practically hands free and requires little to no customization. But the cheaper alternative requires extensive customization, which increases the maintenance fees. Bam. Your solution is less hassle. Even if something breaks, it's much simpler to fix. There's always an angle if you have a good product.

Make people feel smart about spending more money to buy your product. Bring them to that decision by acknowledging their pain points. Educate them on why your product does a better job at resolving them. Explain the options in a straightforward manner without bashing the competition. If your product is equal to the competition on everything but their lower price, you may need to shift your emphasis to your company's culture and values. Are you a good corporate citizen that gives back to the community? Are you veteran- or minority-owned? Do you have an upbeat culture that makes buyers want to engage with you? Make them want to support your business even if it means spending a few more dollars.

It's always important to point out what differentiates you from your competition. Find the things that you offer that no one else does. There is no point in saying we do A and they do A, but we do A better. Find the differentiators and explain how you have helped others in similar situations.

When price is a major factor, consider ways to add value to your offering without necessarily lowering the price. This could be through additional features, exclusive resources, or enhanced support. The goal is to make your product more comprehensive, giving customers more reasons to choose you over a cheaper alternative.

I came across such a situation as customer when I was evaluating a smart phone purchase recently. There were lower-priced smartphones available but one of the brands emphasized devices' advanced security features and longer battery lifespan. It was clear that the brand targeted privacy-conscious professionals and showcased how the phones' durability led to lower total ownership costs for me. They were also offering customer support as long-term value, so I went with the phone that gave me additional value for dearer price.

Clear communication is key. Ensure your value proposition is front and center in all marketing materials and customer interactions. Use straightforward language to explain why your product is worth the investment. The clearer your message, the easier it is for customers to understand your product's value.

Competing with Lower-Priced Products: Understand Value: Highlight unique features and benefits that justify your price. Know Your Audience: Tailor messaging to their needs and pain points. Emphasize Quality: Showcase superior materials and craftsmanship. Add Value: Offer extras like warranties or premium service. Be Clear: Reinforce your product’s benefits consistently. Innovate: Regular updates keep your product relevant. What’s your strategy for competing with lower-priced alternatives?

The market is always evolving, and so should your product. Continuously innovate to stay ahead of the competition. Stay updated on industry trends and invest in R&D to keep your product relevant. Continuous improvement not only maintains your competitive edge but also provides new features that can justify your product's price.

Continuous innovation is indeed a powerful tool in a product marketer's arsenal. It's not just about staying relevant; it's about leading the market and setting the pace for your industry. Focus on customer-centric innovation that directly address customer pain points or enhance their experience. This approach ensures that your innovations are not just technical achievements but meaningful improvements that customers will value.