Monday, February 4, 2013

Don't Compete on Price

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Don't compete on price. I've been stumbling into this piece of advice more and more frequently as of late, and the more I think about it, the more I see its essential wisdom.

There are certainly some organizations that can successfully compete on price. They generally have high-volume, low-investment business models, and are perfectly suited for the low-price strategy. As a consumer, if I'm after a commodity, whoever can get it to me at the lowest price is going to win my business--but not my loyalty.

And this is why competing on price is a bad strategy for associations. There are many different kinds of associations with many different kinds of products and services, but first and foremost, they are all in the loyalty business. Trying to compete with another provider on price is the surest way to destroy the loyalty members might have for an association and transform their thinking into that of the disinterested consumer.

This has many implications for associations. For one, it means they have to be much more selective about what kinds of products and services they're going to offer. Not competing on price means they must steer away from products and services that other organizations can offer at the same quality at lower prices. If you can't win on price, then you probably don't want to playing that game with more nimble and resourced opponents.

Focus your attention elsewhere. Focus it on the things only your association can uniquely provide, or the things that you can offer at a much higher quality than anyone else. If that means doing fewer things, that's probably a good thing. If that means leaving needed revenue on the table, re-examine what your members are willing to pay for the unique offerings you can provide. You may be surprised at what a focus on loyalty rather than price can bring you.

This post written by Eric Lanke, an association executive, blogger and author. For more information, visit, follow him on Twitter @ericlanke or contact him at

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