Saturday, March 17, 2012

Working Smarter: Know What Your Competitors are Doing

When I went to deposit a Clickbank cheque (overseas cheque) at a Westpac Bank earlier this week, I was told there would be a $28 handling fee. As I receive regular Clickbank cheques and the most I have paid is $15 (which I thought was a rip-off), I was a bit taken aback. Within a relatively short time, fees for banking cheques had increased dramatically. I decided to try one of my other bank accounts.

I called in to the Commonwealth Bank almost next door and the cheque deposit rate was $10 which I thought was much more reasonable and obviously saved me $18. While there I opened a new account that cost nothing to open, has no ongoing fees and pays 5.5% per annum interest. It allows one withdrawal per month without the interest dropping to 3.5%. Now I'm going to deposit my business income cheques in that account and transfer running costs to another account once per month.

I've also decided to cancel my two credit cards at the Westac Bank, with which I have been a customer for 40 years and get credit cards with the Commonwealth Bank. I don't like to be ripped off.

The take home message from my experience with two of Australia's "Big Four"banks is that you need to know what your competitors are doing. These days, most people shop around for prices before making a purchasing decision.

If I want a new pair of shoes, I don't usually just buy them at the first shop I see, I look for them at several shops and choose the one that has the best price. Recently I saved $30 when I bought a black pair of leather New Balance walking shoes. As I see it, and I think you'll agree, the $30 is better off in my pocket than someone else's.

Even firms as large as Woolworths apparently have "spies" checking out prices at their competitors shops. If you are trying to sell something at a higher rate than your competitors, there's a very big chance that your business will suffer unless it's only a small amount of difference. So you need to know what your competitors are doing to make sure you are competitive.

If your prices are similar to or identical with local competitors, if practicable you need to do something different from your competitors to make sure you get the business.

In the competitive society in which we live, those who survive in business are those with novel ways to attract and retain customers. Make sure you are one of the survivors.

Robin

2 comments:

  1. Very practical advice! I wish we could go home loan shopping again, I am much wiser now than I was a year ago and would make a better decision I guess. We all have to be two steps ahead of the banks anywhere!

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  2. Thanks for the comment Tina. Mortgage shopping is essential. When you buy your investment property, talk with Gordon Minett and then go see a broker. Mortgage brokers are usually not aligned with a bank and will look for the best deal for you at no expense to yourselves.

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