Creating a Competitive Advantage

On my last blog I discussed setting a pricing strategy to acquire business and make a profit. Pricing, however, is not all inclusive to numbers. If you don’t provide a great service, it won’t matter where you have set your prices, you won’t remain in business.

That being said, I suggest you look at your competition. What are they doing to get and keep business? Look at their prices, response time and any other way that they reach out to and/or treat the clients.

Obviously, pricing is important and must be considered if you’re looking to have a competitive advantage. You don’t want to be the cheapest service, although an inexpensive service is good. Keep in mind that the difference between cheap and inexpensive is a matter of quality provided. And until you are well established, you probably don’t want to be the most expensive service provider.

Some process service companies feel they get the competitive advantage when they offer to not charge anything at all if the paper is not served. I strongly caution against this model as it is a double-edged sword.

Think about your pricing strategy. How will you cover your costs (there will be costs incurred) and just as important, how will you, if you don’t charge just because the papers could not be served?

But, you reply, by offering this bonus, word will get out and I can get a ton of business coming in quickly. That will make up for it and that’s good, right? Wrong!

If you get in too much work too quickly, your quality of service could suffer. But Bob, that’s not a problem; I’ll just hire more servers.

Say you do hire more; will you have the time to properly train them? What happens if they decide to “gutter serve” your papers. Gutter serving is what occurs when your server has said they served the paper, but they may not have. There have been instances where this has been known to happen. The server’s concern being that they will go to the time and expense (gas, parking, etc.) to attempt service and if it’s not served and you don’t charge, they won’t get paid because you’re not getting paid.

Say you decide to pay your server regardless. Did you factor this in with your pricing strategy?

The bottom line is, set a fair price using a pricing strategy that takes into consideration all the expense you will incur and what the marketplace will bear. Don’t be ruled by price alone. Be competitive, but focus on providing a worthwhile service in terms of service and quality and will be able to justify what you charge.

For more tips on running your process service business, check out "The Business End of Process, Running a Process Service Company from the Group Up". It's available on Amazon.com  http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0. 

One more note, I just want to thank you for reading my posts. I appreciate your interest and I welcome your feedback.