You can use CI to counter unfair competitor claims. It is the same energy you use to pinpoint a competitor threat, which can be used to counter unfair competitor claims through “Counter Intelligence”. These skills can help save you dollars by uncovering errors in supplier invoicing and offset claims against you by companies you have alliances with.
For example, if you are an importer or manufacturer, no doubt you have been faced with complaints by some distributors that you are competing unfairly by undercutting their prices.
A carefully planned pricing audit can be an effective counter to these complaints.
Let’s assume you head up marketing for “Home Alarm Systems Inc.”, a residential alarm systems manufacturer. In addition to selling online, you distribute product through 175 independent dealers. Two long standing dealers have complained that you are undercutting their prices 15% and threaten to move to your competitor. What to do?
- Conduct a mystery shop to determine whether the dealer prices, to purchase and set up an alarm system, include charges for inspection, installation and travel. Turns out theirs do not, but yours do.
- Prepare a summary table to illustrate how their prices actually end up being lower than yours:
|Dealer “A”||Dealer “B”||Home Alarm Systems Inc.|
|Dealer’s price > than mfg.’s price?||Yes||Yes||N/A|
|If yes, by what %?||15%||9%||N/A|
|Inspection fee – included in price?|
|Factor out the Inspection Fee||$50||$30||–|
|1st price adjustment||$410||$400||$390|
|Installation fee – included in price?|
|Price for Installation 0- factor it out||$25||$25||–|
|2nd price adjustment||$385||$375||$390|
|Travel fee – included in price?|
|Travel fee – factor it out||$50||$60||–|
|3rd price adjustment||$335||$315||$390|
|Readjusted dealer quotes vs. mfg.||Lower||Lower||N/A|
I have used this approach for safety equipment, furnace manufacturers, and packaged goods clients facing similar complaints. Strategy is the same and simple to follow – counter their complaints by uncovering errors in their argument.
For additional information, check out our article on Counter Intelligence: How to Carry Out a Dealer Pricing Audit