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#84: Look Out Below: Fending Off Low Priced Competition

Posted By Mark Haas CMC FIMC, Thursday, July 2, 2009
Updated: Thursday, July 2, 2009
The current consulting market and availability of technology has created a surge of low priced consultants. I am sure my services are much higher value than these "competitors" but I don't take them lightly. What should I be doing?

There are two ways to look at this. On the one hand, regardless of how good you think you are, the client is the ultimate arbiter of the value of your services. If a low priced competitor has "good enough" services for a lot of managers, then that is the main market in which you work. On the other hand, if there are enough prospects who find your services particularly high value and are willing to pay for them, then you may be in a sufficiently big enough market of your own.

However, don't discount the fact that there is a steady pressure to commoditize consulting services. Organizational assessments used to be a custom job until the advent of well-researched web-based assessments. Personnel assessments are the same. Business plans still require experience and insight but many managers are moving to low priced software that structure the plan, provide financial analysis, and compare the planned enterprise against current market standards. Financial analysis or project management by computer can get a manager most of the way to their objective before a consultant is called in.

Tip: This is a rising quality of competition that you must pay attention to. Pick up a business planning package or assessment service to see how your services compare. Become familiar with these "competitors" so you can be clear about how your services differ. If necessary, you may have to adjust your prices to the "new normal" or find ways to add services that can't be duplicated by software or standardized processes.

© 2009 Institute of Management Consultants USA

Tags:  competition  customer understanding  innovation  market research  marketing  sales 

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