Is a competitor running a big price promo that will attract your customers?

Guess what happens if your competitor (especially if they are an industry giant) has a big sale on and you sell the same products but not on sale? Potential customers will click on their ad and click on your ad and then buy the cheapest — i.e. not yours! This is a huge expense and waste of advertising spend for a small online shop. Panicking due to lost sales leads to businesses running “me too” sales campaigns and losing a lot of money in a run to the bottom. Don’t fight fire with fire. Instead, reduce your budgets and/or your bids on your campaigns that sell the same kind of products as your competitor. Then wait. Eventually they will run out of steam at the end of their price promo and they’ll pull back their budgets a bit and rest. And then this is exactly when you should come out swinging! Increase your budgets to make up for the lost period when your competitor was on promo, and take the floor — if you want to do a price promo campaign of your own, this is the time to do it as your competitor will have put their prices back to normal. If they blasted social media they may have whipped people into a buying frenzy for your product category, and this can be a good sales period for you.

On a slightly sideways topic here, if you have a big competitor with more than 50% overlap with your best selling inventory, you’ll want to subscribe to their catalogs and promotional materials and pull back your ads whenever they promote a big sale, except perhaps in November when everyone is on sale. It’s also a good idea to diversify your inventory so that no single competitor can dry up your entire income stream when they run a sale.