Advice Needed
Andrew Nugteren
I have an idea for starting a small business that would run in direct
competition with a major provider of the same service. I am confident that
I can compete price-wise, can provide the same level of service that is
available at present.
However, I am wondering the *best* way to be able to convince a major
company that I could do the same job as good or better, while maintaining a
cheaper price. I am sorry that I have to keep the actual service that I'm
considering under wraps, but hopefully any information you have, would apply
to any industry.
Thanks
Andrew
Alan Bird
The best way to answer your question, is from the other person's point of
view, unless you are offering something unique, there is no reason for the
company to take the risk, or time to make a change.
If you are new, the biggest concern would be if they changed their service
provider to you, what would happen (Heaven forbid!) if you went out of
business. Just offering the same service for a slightly less price wuld
normally not convice most companies to change over.
Also are you really sure that you can provide the service for less? Alot of
startups fail due to the mis-calculation of costs in the beginning.
My suggestion is to offer something different in the service, faster delivery,
guaranteed service, etc... that the other person doesn't and charge MORE!
Specialists are normally worth more than generalists -- seen a doctor lately?
Good luck and remember enthusiasm is everything!
Alan Bird
UNIVERSAL DESIGN, INC.
mailto:al...@digifax.com
http://www.digifax.com
Marketwrkz
>competition with a major provider of the same service. I am confident
>is available at present.
>
>However, I am wondering the *best* way to be able to convince a major
>company that I could do the same job as good or better, while maintaining
>a cheaper price.
If you are going to compete on price, you have to build credibility with
your clients by demonstrating why your service is less expensive (not
"cheaper") than your competitors' -- e.g., lower overhead, new technology,
more modern equipment, etc. And you must convince that you can provide a
level of personal service that a large company can't give.
If you're providing a service, you might want to reconsider your "cheaper"
pricing strategy. Potential service clients often equate price with
quality and qualifications -- which is why companies are willing to pay
$5000 per day for a big name consultant that may or may not deliver any
better advice/service than someone who charges substantially less.
Good luck!
Cynthia Baker
*** Marketworks(sm) ***
Specialists in Market Planning & Analysis - New Product Development - Information Services - Marketing Research
"Ask about our free Tradmark FAQ" . . . E-mail: Marke...@aol.com
(206)217-9575 Fax: (206)217-9607
3447 33rd Avenue W. Seattle, WA 98199
Stephan Harold
> I have an idea for starting a small business that would run in direct
> However, I am wondering the *best* way to be able to convince a major
> company that I could do the same job as good or better, while maintaining a
> considering under wraps, but hopefully any information you have, would apply
> to any industry.
Target and court your first customer; meet face-to-face; bring
testimonials about past performance and establish can-do credibility in
your new venture; offer an iron-clad, no risk, full refund guarantee; defer
billing for 90 days; throw in something extra; flatter your new customer
for their far-sightedness and pioneering spirit; show them how the
decision to work with you will make them more successful...
hope these few 'generic' thoughts help...
Stephan
(800)263-7056
Richard Gill
>I have an idea for starting a small business that would run in direct
>I can compete price-wise, can provide the same level of service that is
>available at present.
Presuming that this is a competitive industry (which ones aren't today?),
there are already firms competing on price to deliver the service. Unless
you have a radically more efficient way to deliver the service, you, as a
small startup, would have difficulty competing on price with the big boys.
>However, I am wondering the *best* way to be able to convince a major
>company that I could do the same job as good or better, while maintaining a
>cheaper price.
Presuming that this service is important to the major company, they will
likely be more concerned with quality and the risks associated with the
supplier. So, you must first convince them that you can deliver a comparable
product reliably; I don't know how you can do that unless you are aleady in
the business.
Only after the quality issue is dealt with will anyone care about price, and
then maybe not as much as you think. Most businesses value long term
relationships with suppliers and are unlikely to jump ship unless the product
is a real commodity (like long distance phone service).
I would try first selling to small businesses and then approach the big guys
once you have a good track record.
Good Luck.
--
Dick Gill di...@gp.com
Gill & Piette/Capital Systems uunet!gandp!dick
1568 Spring Hill Road, McLean, VA 22102 (703)761-1163
Growing old is the only way to live a long time. Dad 1906-
Gillian Gardner
:I have an idea for starting a small business that would run in direct
:competition with a major provider of the same service. I am confident that
:I can compete price-wise, can provide the same level of service that is
:available at present.
:However, I am wondering the *best* way to be able to convince a major
:company that I could do the same job as good or better, while maintaining a
:considering under wraps, but hopefully any information you have, would apply
:to any industry.
You might want to try an *introductory* offer. Perhaps a small service
for free or a discount on their first order.