Posting competitors prices?

[ahmed_uk]

can anyone see a problem with me comparing the price of my widgets against those of my competitors and posting the results on my site?

my prices severly undercut theirs, so this could be a big pull for me.

any thoughts?
ahmed

[jsinger]

In the U.S. the gov't used to encourage such advertising. But you may be firing the first shot in a price war. Competitors can lower prices on the items you sell, while raising them elsewhere.

They will fuzz up things by emphasizing service, quick deliveries, easy returns, cheaper shipping.

THEY will attract loyal customers looking for great service, while you will get (maybe briefly) customers who want the very lowest prices.

[Rachel]

Ahmed, I don't post a competitor's price when they're more expensive than I am, but I do let customers know when I realize I'm high on a item and tell them know where they can get it more cheaply. For me, this has created trust, and it's a way of letting them know I'm less expensive on everything else without actually coming out and saying it (which always sounds like ****iness to me). For me personally, I won't buy from a company that seems to be bitter towards their competition. This had had the nice side affect of putting me on good terms with several of the competition that I mention, and we send recommendations back and forth. I've also gotten together with a couple of them on occassion to buy in larger bulk than we could have individually. Better pricing for our customers, and better profits for us.

Rachel

[ytswy]

ahmed, usual disclaimer applies (this is not legal advice), but I think UK law has changed recently to allow direct comparison in marketing.

Certainlly I've seen TV ads for banks which have quoted their competitors' rates.

You probably would want to be sure you were representing your competitors fairly (eg including all shipping charges). Also, as jsinger said, its the sort of thing your competitors are likely take personally.

[gibbon]

one thing about posting competitors prices is that you have to mention the competitor name.

you are therefore promoting them on your site and in essence giving them free advertising

[sem4u]

I also think that the law has changed to allow this. Some websites already have price comparisons, e.g. 'this widget costs £x on site1 and site2 compared with £x on our site'.

[Marketing Guy]

IIRC with UK print / TV / Radio ads, you could mention the competition, but not criticise them.

Ie, you can say why you are better than them, but not why they are worse.

Scott

[TallTroll]

>> you can say why you are better than them, but not why they are worse.

Comparative advertising is 1 thing. Libel is another. Beware what you publish, always

[jsinger]

Courts (in the U.S. anyway) are very reluctant to litigate commercial competitive claims. Imagine an ad campaign that hawks: "Supreme Court decides Coke tastes better than Pepsi!"

[TallTroll]

I believe the thrust of the UK legislation means that you could say, for example

"In blind taste tests, 60% of consumers preferred Coke to Pepsi", rather than having to use the old "Brand X" ploy, so in that sense the rules on comparison have loosened. If you said "In blind taste tests, over 50% of consumers said that consumers said that ColaTaste tastes of old socks, buy Coke instead", that might not be a fair comparison under the terms of the legislation, but a libel

Anyway, returning to the original question

>> my prices severly undercut theirs, so this could be a big pull for me

Consumers are suspicious creatures, and massively lower prices could create the impression that you actually offer an inferior product and/or service. You should give thought to establishing credibility with the customer, then pleasantly surprising them with a low price as the "clincher", IMO

[jamesa]

>> Consumers are suspicious creatures

Yea the mention of "severely undercutting" the competitors prices threw up a caution flag for me too. Especially if you're the only one out of the ballpark. Be careful here. Even if it works in closing the sale you could be "severely undercutting" your profits.

I like to think in terms of value more than just price alone.

[PCInk]

In the UK you are allowed to compare prices.

But be careful. We had one company (I won't mention who they were: PowerGen, oops!) come to our door and show how they could save us money over the year.

Looking at their figures revealed something surprising: the firgures for ScottishPower were completely different from what were actually paying. They had the figures a lot higher.

If I had really been comparing, I would have checked both companies and found that ScottishPower were cheaper.

Now, PowerGen were either illegally promoting false advertising, or thir small print may have had different dates for when they took the figures. Either way, I now always compare and check the competitors.

In this way you are advertising competitors services for free.

[ahmed_uk]

thanks very much for all the input, some very valid and interesting points were rasied.

[Wired Suzanne]

To posting compettitors prices on our website.
uhmm, for me It should not done, even it allow,
if you looking in the side if seller, posting or telling other price to show we are expensive or cheap from them, it should not do, just the seller ethnic.
But the way to day is post the standard price or market price, and post our price to show how cheap we are when compare with market price. It should be more acceptable. Or what do you think?

[Philip_M]

You need to be very careful if you quote a competitor by name, as if the (higher) comparative prices you specify are incorrect they may reach for their lawyers. You could make like Esso or Tesco and simply say that you "watch" (unnamed) competitors' prices, and yours are "among the lowest".

As others point out, if your widgets are significantly cheaper then people will suspect that they are correspondingly inferior in some respect. Most shoppers realise that unusually low prices or massive discounts are often used as bait to mask other shortcomings, although there will always be those stonebrains who fall for the "ours are the cheapest" line.

In fact price is not nearly as powerful an ingredient of the marketing mix as is generally thought. Do you live in the cheapest house, wear the cheapest clothes, eat the cheapest food and drive the cheapest car? No - the truth is that people usually buy not the cheapest product but the most expensive - that they can afford. In other words, the determinant is how much they can spend on this item. Also, while we all like a bargain, few of us can remember how much we paid for something a year ago. The pleasure of a low price is short-lived - but recollection of poor service or rude staff in a restaurant,shop or filling station will last a lifetime.

Many people can name a business which as a result of poor service (rather than higher prices) they would not patronise again were it the very last on earth.

For what it is worth, we sell rather specialised items and our pricing policy is "Never knowingly oversold". This has never seemed to be a problem with our customers.

[danieljean]

There's been some really excellent advice here.

If you are undercutting your competition without an explanation, it will look odd. If you say something like "we buy directly from the manufacturer without going through middlemen so we can pass on the savings", that could reassure some.

But low prices are fundamentally dangerous if for no other reason than the very real risk of starting a price war!

If you have better margins than your competition, why not use it to offer free shipping, or even free next-day shipping? A better margin can also let you outbid your competition on PPC advertising and affiliate marketing.