WTF! A guy is ruining my business!

[Vanrithy]

I was having about 40 clients using my service. I am running a WordPress MU and target small businesses to give the affordable price for them owning websites.

Because I'm using WPMU, I have various themes which are specializing on those small businesses niche. They're paying $50/month with me.

A guy is competing with me by using a very ugly truth of business mind. He's a web designer and is providing very cheap cheap rates of custom website design. He's charging $100/website and $10/month for hosting, domain name and maintenance services.

The most important thing is he aiming and targeting only with my clients (I don't know if I've done wrong with him in the past or not because I don't know him at all).

Because he's providing custom website design and monthly services with a very cheap rates and cool stealing my targeted clients, I've lost nearly 80% of my clients.

I don't want to compete with this kind of cheaply services, but I don't want this guy to ruin my business at all. Yet, how on earth that I could custom design a website for each small businesses with this rate, $100, as well as a $10 monthly services including hosting, domain name and maintenance?

While this is the lounge, just a head up and shout with this kind of jerky (I don't mean that I'm a loser who is losing the game and cry)!

 

[akacash]

I could see that being very annoying. This might sound counter-productive, but since you have lost so many accounts and have extra time, why not just focus on them and make them the best possible sites/designs. Then, and I say this seriously, raise your asking price using the current clients that you just spent all the extra time on as your reference for the quality of work you'll now be providing. The reason is, if you can't or don't care to compete with someone undercutting you, then don't give them the opportunity to. Instead of selling your services for 'x' amount, start to charge more and work with fewer clients. If you can provide work that's of enough quality you'll not only have customers, but very happy ones. Basically if he want's to undercut you, let him. Rather than try to compete, you increase your quality to a level that he can't afford to, or doesn't have the knowledge/skill to match. By charging more and offering a better quality you'll also price out a lot of customers that are likely to jump ship at the 1st hint of a saving a dollar. Since you're not charging a premium price, you'll have customers that have more invested in you as well. It's a risky move, but it could end up paying off big time in the long run for you.

 

[Wali7]

 

[zigato]

Don't compete on price. Compete with emotions, feelings, quality of work, customer service, etc.

 

[deancow]

I take it you have no contract with your clients? in the future try and lock them in to a 2 year hosting contract (even if you have to do it cheaply) over the long term you should make more and make it harder to have them stolen from you.
In the mean time all you can do is lower prices and compete with them or do cusom designs but for that price you wouldn't even be able to outsource it.

 

[JDIZM]

How did you gain those clients in the first place? Use those skills that gained your existing clients to carry on and acquire a new batch of fresh customers.

just take this as a knock on the chin and one of those simple lessons in life.. business is competitive, I have suffered similar things myself but what makes you good is how you come back from these moments.

Improve your service and always adapt!

 

[IamNRE]

He out play'd you. Adapt or move on to something else.

 

[Banned member 185991]

 

[BuildMoreLinks]

competition can always be good or bad, its just that way you take it! If you compete with him on the price you will lose out on your profits so just try to outplay him.

 

[KHer0]

This is not stealing, this is called Business is better than you, find why and do better or give up

 

[lucabrasi]

In situations like this I like to ask Don Corleone what I should do? And then act accordingly. Of course I am Luca Brasi so I always do what the Godfather says.
...................................................
Now for a serious answer.

How do you know he is only targetting your clients. Are you in a small enough area that he can only sell to your clients. How is the competition isolating people using your services from those not using your services.
He may have just done a search of business in you area and contacted all of them. It may not be personal at all.

 

[funkybunker]

He out play'd you. Adopt or move on to something else.

Yes, you should adopt babies. They'll make you forget your problems since they'll become your new ones. Plus they're cute.

 

[funkybunker]

For the OP; you should have charged more to begin with because now you can't ask your clients to pay more. Only future clients which is perfectly fine.
I don't see how he's the one charging low however. In my opinion you're both low-price bandits and causing business owners to see less value in your craft.
This is the truth OP. You created your own problem and must accept it. Collect higher paying clients now and charge them $500 minimum for design + monthly hosting if applicable...I don't advise you to give them cheap product either though.
Many times LESS high paying clients is better than MORE low budget clients.

 

[WinningIO]

Which country is your market?

 

[phpbuilt]

Now I know who took all my $100 a month hosting clients for $50!

 

[Vanrithy]

I believe that most developed countries are charged well over $500/month for the kind of services.

Before I opened this services, I've researched the market and the need of those business owners. I am in a small country in SE Asia which is hard enough to charge $50/month for those small business owners.

I must admit that I couldn't charge that low to compete with that guy; I have to adapt this situation and move on to another thing. The point that I could not compete is the PRICE. They always use words cheap, money, low and price to compare my services with another services. They didn't even want to know how the features and more benefits that I could give them at all.

It's different here because mostly those business owners have no clue or very old school and not know much about this kind of things. They just have set and go and to have the website to reputed their business.

I am not providing them low quality and always contact them to care about their business. Yet, they're just letting me know that they could have similar kind of service with cheaper price.

Anyways, There are many small businesses here; I am surprised that 100% of his clients were mind. I must aim more another target because I could not stand to compete with quality and price or to lower my price to compete at all.

~$2,000/month to deal with 40 business owners is hard enough; therefore, I couldn't get $400/month to deal with them. This time I will aim another target to bigger businesses.

 

[funkybunker]

I understand your price concern with a less developed country. I'm certainly not saying give up, just be open to new business models that people still NEED - that you can make a comfortable living from, even if it's less total clients. You can definitely stick with this if you explain what & how you deliver that your competitor doesn't. And charge higher rates for your next clients. You may even approach existing clients with a different service, but remember if they dislike the other guy they'll likely come back to you.

 

[seocloaker]

I wouldn't worry too much. He won't be able to sustain a good level of service to his clients at that low cost, you'll probably find they come back to you when things start to go wrong.

 

[GreyKnight]

What I may suggested is that you change the way you price your product.

You can :
1. Steep down your price, or
2. Increase your price.

Increasing your price, adding some extra service, making your service more luxurious, etc. can garner you more profit. If your competitor could sold 100 product for $ 1, while you can only sold 1 product but it is priced $ 150, you are gaining more profit. While volume can speak words about profit, price can speak words about profit too.

 

[safex]

One way is to Give that Guy Fake Work Load..Like Daily 2-3 Sites..Keep him Busy that he can't get more Clients work, and Launch almost same service with even little Lower Prices but different Brand name, to Target his other Clients, and get Control on Both Businesses. His Idea will Kill him Automatically.