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:
- Buy a kiddie pool at Walmart (or Home Depot or Walgreens) and put it in the back yard
Here are some other alternatives I might consider:
- Book a last minute trip to Grand Cayman hang out on Seven Mile Beach
- Become a member of the Greenwich Club
- Reserve a campsite on Curlew Pond in Miles Standish State Forest
- Throw a bag of ice in my tub and sit in the bathroom pounding beers
Actually, there are even more alternatives if I’m willing to compromise on some of the details:
- Have central air installed in my house and sit in my basement binge watching Goliath
- Go to the movies and cool off in a darkened theater
- Do nothing
(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.
Yours,
—J
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.