Is it better to compete with price or service? That answer depends on several factors. If you decide to compete on price, the customer is less likely to be loyal to your retail business. If a competitor decides to have lower prices than you, many of them will shop there.

Instead of competing by having the lowest price, it is better to compete on value. This way you do not have to be the lowest price, but the customer is happy with the value they received with a purchase from your retail business. The value could be many things including extra service, free with purchase, free delivery and free gift wrapping to name a few. Most customers are looking for the best value possible while shopping. This does not always mean the lowest price.

It is best if the value is not exactly the same as your competition. This way customers would be comparing apples against oranges.

Service is the best way to go for most retail businesses. Service customers are much more loyal to the retail business, as long as the service level is good. Services are a great way to make your retail store stand out and be superior to your competition.

The key is to deliver more value to your customers than your competition. While this sounds difficult in many cases, it is easier than you think. It does require some additional effort.

Many retailers give average service. They do not take the extra steps needed for difficult shoppers. In reality, doing something special for a difficult shopper can add more profit to the store long term than with good customers. The difficult shoppers will spread by word of mouth your exceptional service.

Many small retailers have terrible refund policies because they are concerned with people taking advantage of it. Studies have shown that store with liberal refund policies do much more in sales and profits than the strict retail owner. In addition, not having restrooms for shoppers to use is common place and also one of the major gripes by customers.

Challenge your employees to increase the service level in your store. Give shoppers more service and more value and more sales and profits will be yours.