June 16, 2018

Competitors vs Alternatives

The more alternatives your prospective clients believe they have, the less pricing leverage you will have.

Please note that I specifically used the word “alternatives” here, rather than the more commonly used word “competitors”.

The reason I did this is that the word “competitors” is something that sellers (i.e., you) tend to think about. Buyers (i.e., your clients) don’t usually think in terms of who your competitors are - they think in terms of what alternatives they have to hiring you.

Here’s an example:

Walmart’s main competitors are businesses like Home Depot, Costco, and Walgreens - i.e., bricks and mortar retailers who carry a overlapping selection of products.

Now, if I want to cool off with my feet in the water while sipping an ice cold Bud Light Lime, one of my alternatives is:

Here are some other alternatives I might consider:

Actually, there are even more alternatives if I’m willing to compromise on some of the details:

(Never forget the “do nothing” alternative - it’s probably the most commonly chosen)

The moral of the story:

Don’t think too hard about your competitors (i.e., other businesses or products or services that - in your opinion - look like whatever it is you offer).

Instead, think about the problem that your ideal buyers are facing and how you are different from the other alternatives that they are considering.



P.S. FYI - Today I raised the price on The Freelancers Roadmap to $49 but for the next couple days you can get it at the old $29 price using coupon code TFR20 at checkout.