How Your Inefficiency Gives Your Competitors a Pricing Advantage

Could your competition have a cost structure that gives their business strategy a competitive edge over you? If you are operating inefficiently the pricing you offer customers will reflect it. There are three main areas where inefficiency could be directly hampering your ability offer competitive pricing.

New technology. Are you still doing things manually that you could do more efficiently through technology? If not, you are passing the extra labor costs on to your clients. Your competitors know that and are capitalizing on it.

High labor costs. Are you using any proven systems to evaluate employee performance or are you allowing non-performers to keep their jobs for life? If you used a system like Topgrading you would ensure more “A” players on your team and would be able to get more done with fewer people. Leaner and meaner companies can charge less and compete on price.

Process Failure. Inefficient processes and communications systems coupled with redundancy, unnecessary meetings, ill-timed reviews, and other workflow issues significantly increase cost to each position. Usually this inefficiency is passed on to the client.

These three factors can easily add 40-50% to your overhead costs. Your competitors are paying close attention and address these issues. Then they go to market offering the same services at 40% less and create larger profits and market share.

Have you looked at your competitors’ pricing lately? Are you beating them? If not, it could be because they are beating you with a better business strategy.

Howard Shore is a business growth expert who provides business strategy and consultation services. To learn more about how an executive coach, management consultant, leadership training, or business coach can help your team with employee engagement, please visit his website at or contact Howard Shore at (305) 722-7216 or email him