Price cuts
If their price is lower than yours, then employing a price competition strategy is one option although all marketing experts would advise against it as price cuts are followed by competitors and you’ll end up starting a price war.
A McKinsey study demonstrates that a 1% cut in price translates to a reduction in operating profits by 8%, assuming that there is no increase in registration.
Offering more value
Consider instead to compete to offering greater value
- Ensure that your current parents are very satisfied with your services. They are your best testimonials.
- Extending your operating hours so that you can cater to parent who work a little further away
- Install webcams so that parents can see their children in school
- Have a photo gallery on your website and periodically upload photographs of the children
- Develop a monthly or quarterly newsletter that is emailed to all parents
- Fine tune your daycare service by possibly offer complimentary enrichment lesson or improving upon your current curriculum
- Offer to feed the children dinner if you are extending your operating hours
- Spruce up your daycare regularly, paint tattered wall and put up new artwork done up by the children
- Ensure that your daycare is ever ready to receive new customers
Remember, the greater the perceived value of your daycare, the less likely your customers are going to haggle on the price.
