Three Ways to Fight Undercutting Competitors

by / ⠀Startup Advice / April 26, 2013

Undercut Your CompetitionIn the small business world, competition is prevalent, no matter where you look. Often times, companies that thought they had a solid fan base in their market share find themselves competing to match or beat their competitors’ prices. While this can cause an immense amount of frustration, especially considering that your lower-cost competition won’t disappear, it is easier to fight the competition you are familiar with than the competitors you aren’t. When a competitor undercuts your company, it is pertinent that you take action, or risk losing a substantial portion of your client base to the undercutting competitor.  If your company is losing business to a competitor, here are a few things you can focus on to fight the undercutting.


While you won’t always be able to beat your competition’s prices, you can win your customers over with excellent customer service. One of the greatest ways to draw new customers to your company is to provide impeccable service that will leave your customers bragging about you and your company. Going the extra mile for your customers – establishing a consumer-friendly return and exchange program, and sending personalized notes with each purchase – will show you care more than the competition, and will help you establish brand loyalty.

Reduce Overhead

Unfortunately, you might not be able to cut your costs to the consumer without producing a lower-quality product. However, closing the gap between you and your undercutting competition can be achieved by tweaking your production strategy to reduce your overhead. For instance, consider using an online terminal or online invoicing will not only reduce your company’s paper waste, but to help cut operational costs. Just a few tweaks to your production and operation practices can allow you to lower your prices enough to maintain a healthy competition with your competitors.

Competitive Positioning

When a competitor undercuts you, you’re most likely battling a lower-quality, cheaply made product or service. Your goal should be to make this common knowledge to consumers, both yours and your competitors. The use of competitive positioning – defining how to differentiate yourself from your competitors and creating market value for your company – to show consumers that your company is superior to the competition is one of the methods your company should consider. Rather than talking poorly of your competition, state the facts to prove to your customers why your products and services are the industry standard.  Nobody likes a smear campaign, so make sure to talk your brand up rather than attempt to tear your competition down.

A great example of a successful competitive positioning campaign includes Goldman Sachs. When the company transitioned from investment to commercial banking, it saw the need to reposition its entire company instead of focusing on a specific product. When Goldman Sachs moved into commercial banking, their investors, employees, and clients needed to shift as well. Both companies needed to influence how they were perceived, which involved competitive repositioning at a company level.

If you want to remain an active player in your industry, you will need to react intelligently to undercutting. Tell your customers why your products are superior and worth paying a little more for them. If you can establish yourself as the superior brand in your industry, you shouldn’t have to sacrifice profits in order to remain competitive and grow your business.

Bradley Derringer is a blogger for TechBreach.

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About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.