Why Some Small Businesses Get Stuck Competing Only on Price (And How Marketing Fixes It)

By ERIN LARISON
COO, Larison Media

If you own a small business, you've probably heard some version of this before: "Another company quoted me less." Maybe they ask if you can match the price, or they tell you they found somebody who can do it for half as much.

Those conversations get frustrating fast, especially when you know there's a reason you charge what you charge. Maybe you pay good people well. Maybe you've spent 20 years getting really good at what you do. Maybe your process prevents expensive mistakes, your team actually answers the phone, or you simply show up when you say you're going to.

The problem is that your prospective customer may not know any of that.

When customers can't see much difference between you and the three other businesses they're considering, price becomes one of the easiest things to compare. That's where marketing can make a real difference.

If everybody looks the same, the cheapest option makes sense

Put yourself in the customer's shoes for a minute. You need an HVAC company, accountant, landscaper, photographer, contractor or attorney, so you head to Google and find four businesses that seem like reasonable options.

Then you visit their websites and everybody says basically the same thing: quality service, experienced professionals, customer satisfaction, affordable prices. There might be a slightly different color scheme and a different stock photo, but you still don't really understand why you'd choose one company over another.

So what do you compare instead? Probably reviews, availability and price.

Honestly, that makes sense. If two things appear to be basically the same, why would you pay considerably more for one of them?

Your marketing doesn't need to convince people that price doesn't matter. It needs to give them more than price to compare.

Why are you more expensive?

This is a question worth actually answering, and "because we're better" isn't much of an answer.

Maybe you're a contractor who doesn't disappear for three days in the middle of a project. Maybe your accounting firm responds to questions throughout the year instead of only talking to clients at tax time. Your HVAC company might have someone answering the phone at 8 p.m., or your photographer might spend considerably more time planning before the shoot so the client isn't figuring everything out while the clock is running.

Your team may have certifications, training or experience that genuinely change the quality of the work. You might have a process that makes the entire experience easier. You might simply be exceptionally reliable in an industry where that isn't always a given.

Those things have value, but customers need to know they exist. If the first time someone learns why you're different is after they object to your price on a sales call, your marketing had an opportunity to do more of that work beforehand.

Stop saying you're different and start showing people why

This is where a lot of small-business marketing gets painfully generic. We tell people we care about our customers, provide exceptional service and go above and beyond, but none of those phrases tells a prospective customer what it's actually like to work with us.

Specifics are much more convincing.

If communication is one of the reasons clients love you, show people how your communication works. If your process is better, explain the process. If your team has expertise the average competitor doesn't, teach people some of what you know. If you invest heavily in training, let customers see the training. If clients routinely stay with you for 10 years, tell some of their stories.

You don't need to find a better adjective for your business. You need to give customers evidence.

Talk about the things customers actually want to know

Most customers aren't sitting around hoping to learn more about your "commitment to excellence." They have much more practical questions.

How much is this going to cost? How long will it take? What could make the price change? What happens if something goes wrong? Why does one company charge $500 for this while another charges $1,500? How do I know which option I actually need?

Those questions are marketing opportunities, including the ones you might not particularly want to answer.

Pricing is the obvious example. A lot of businesses don't want to discuss price publicly because there are too many variables. That's completely reasonable, but you can explain the variables. You can give people a typical range, talk about what moves the number up or down and explain why two providers might charge dramatically different prices for something that sounds similar on paper.

The customer is going to research it somewhere. I'd rather they learn it from the company willing to give them a useful answer than leave them to figure it out on their own.

Better marketing can create a better sales conversation

Imagine two prospects contact your business.

The first found you on a list with five other companies and started requesting quotes. They know almost nothing about you other than the services you offer and maybe your Google rating.

The second has spent some time with your business before reaching out. They've read an article explaining what your service costs. They've watched a video about your process, seen your team and read your reviews. They already have some idea of what makes your approach different.

Both prospects may still ask, "How much?" But they aren't having the same sales conversation.

The second person has context. They're not only comparing your number to another company's number; they're comparing what they believe they'll receive for that money. That's one of the biggest jobs your marketing should be doing before a lead ever reaches your sales team.

This doesn't mean you need to become the "premium" option

There's a trap here that I think is worth pointing out. The answer to competing on price isn't necessarily repositioning yourself as a luxury business and trying to attract customers with unlimited budgets.

Affordability might genuinely be part of your value. Maybe your advantage is speed, convenience or simplicity. Maybe you've intentionally created a no-frills service that costs less than the competition. There's nothing wrong with that.

The goal is to make it clear why someone should choose you.

A low-cost provider can have excellent positioning, and so can the most expensive company in town. The problem is being stuck somewhere in the middle with a website full of generic claims and expecting customers to somehow figure out why you're worth the difference.

Your content should help people become better buyers

This is one reason we're such big believers in educational content at Larison Media.

If your sales team answers the same question constantly, there's a good chance you should answer it publicly too. Write about it. Make a video. Add it to your FAQs. Send the answer to prospects before the sales conversation.

Explain pricing. Compare options. Talk about common mistakes. Tell people when the cheaper option is perfectly reasonable and when spending more actually matters.

You don't have to hoard all of your expertise until someone becomes a customer. Let people experience some of that expertise while they're deciding whom to hire. That's much more convincing than simply telling them you're an expert.

Social media should show people the actual business

Small businesses sometimes fall into the trap of treating social media like a box that needs to be checked. Post for National Whatever Day, share a stock photo, throw up an inspirational quote, remind people to call for a free estimate, and do it all again next week.

Technically, you're active on social media. But what has a prospective customer actually learned about you?

Social media can give people a look at the business before they buy from it. Show your team. Answer a common question on video. Explain how something works. Talk about a mistake customers commonly make. Share something funny that actually happened at the office. Show a project you're proud of and explain what made it challenging.

Over time, people start to recognize the company and the people behind it. That familiarity isn't automatically trust, but it gives you something much more valuable than a feed filled with posts that could have come from any business in your industry.

Reviews work better when everything else backs them up

Strong reviews absolutely matter, but they're even more powerful when they reinforce the story your marketing is already telling.

If your website says communication matters and your reviews repeatedly mention how quickly your team responds, those things support each other. If you talk about attention to detail and customers specifically praise it, your claim suddenly has evidence behind it. If you explain that your process makes a complicated service easier and reviewers describe how smooth their experience was, the pieces start to match.

That's much stronger than putting five stars on a graphic and telling everyone you're trusted.

Marketing still can't fix a bad customer experience

There is an important limit to all of this. If your whole brand is built around responsiveness and nobody answers the phone, better marketing isn't going to solve the problem. If you promise an easy, stress-free experience and your onboarding process is chaos, customers will notice.

Marketing can help people understand your value, but it can't manufacture value that isn't there. Eventually, the customer experience has to prove what the marketing has been saying.

The strongest brands tend to be the businesses where those two things match. The website, ads, videos and sales process create an expectation, and then the actual experience delivers it.

You don't need every customer

This might be the hardest part for a small business owner, especially when every lead feels important.

Some people are going to choose the cheaper company, and that's okay.

There will almost always be somebody willing to do the job for less. Trying to beat every competitor's price puts you in a race you probably don't want to win, especially if doing so means cutting margins until the business can't support the people, service or experience that made it good in the first place.

The goal of marketing isn't to make price irrelevant. Price will always matter.

The goal is to help the right customer understand why you're worth what you charge.

If someone understands your process, expertise, people and the experience they're buying and still chooses the cheaper option, they may simply not be your customer.

But if they chose the cheaper option because they couldn't tell any difference between you in the first place, that's a marketing problem worth fixing.