A problem that many providers may have at one point or another with their business is – What should you do if your childcare competition is less than you are.  If you have dealt with this issue I am sure you must have thought “OH NO! They are probably going to steal all of my clients.”  I’m I right?  Or maybe you started thinking the only thing that you could possibly do would be to slash your rates.  Well, hold on there!  Before you do that Walmart thing and flip your prices down, let’s take a step back and really take a look at how to handle this issue without devaluing your services or business.  Here are 5 areas to look at to handle what to do when your childcare competition is less than your rates.

What do you do if your competition is less?

1. Analyze the competition

Who is your competition?

Before we can figure out what to do, we first need some key information.  So who is your real competition?  I say real competition because more than likely not every childcare in your area is competing for the same clients.  So determining who is your competitor is key.  In an upcoming post, I will address how to identify your ideal client.  Until then, think about this …

Are you in direct competition with the preschools, daycares or possibly other family childcare in your area?

Competing with what?

Once you have determined who your competitors are the next thing we need to know is what rate are you competing with.  Plainly put, how much are they charging?

This is a tricky one!

Since most providers (myself included) don’t post their rates on websites or even give out that information over the phone, getting specific rates can require a little sleuthing.  I should say that I personally don’t really like the idea of going to your competitor and posing as a potential client.  That just seems underhanded to me.

That being said, it is possible to get that information.  One way is to check on consumer awareness sites like Yelp.  Often times clients will give information that the business might not.  Another way is to ask potential clients who may have toured other facilities.  If you are not able to get this information, often times the local CCR will provide a typical rate range for providers in your area.

Related Reading:  

• How to Stand Out in A Crowded Market
• 10 Child Care Services You Can Offer

2. Consider Collaboration

There is the tendency for people who have similar businesses to consider each other as competitors that are pulling and tugging at the same clients.  The problem with that mindset is that providers might miss opportunities to collaborate with that other business.  Instead of being intimidated by the other business we should look for ways to partner with them.

Here I wrote about how to encourage collaborations with other childcare businesses.

3. More is More  childcare competition is less

It may seem simple but one way to deal with competition is to simply outperform them.  When you were researching your competition you probably got a good idea of what they had to offer.  Well, do more!

Over-Deliver

You might decide to offer different hours, minimum age of enrollment, specialized meals, etc. anything that might give your childcare an edge.  Check out this post for different services you might consider.

4. Experience Matters

You know just because you are not the lowest in town isn’t necessarily a bad thing.  If you have years of experience, child development education, a specialized service, etc. you probably should not be the lowest in town.   So I would say to always take into consideration the experience (or lack of) that your competitor may have.  If you have more, you should probably charge more.  Maybe your business should be at the top of the heap.

5. Stress Your Advantages

Instead of running in the other direction and considering a rate drop, you could simply stress the advantages that your business has over those competitors.  Maybe take opportunities during your tours to stress the advantages your business provides.

Years ago I felt like the larger daycare centers had such an advantage over my little childcare home.  Armed with that mindset, instead of making it a disadvantage I decided to use it.  At tours, instead of stressing my small childcare, I use words like “intimate” and “family-like” to emphasize the advantage of my smaller environment.

Businesses Can Co-exist  childcare competition is less

So before you start running the numbers in your head trying to see how much you can afford to cut your rates, think about this – there are usually several businesses who potentially have the same customer.  Target and Walmart have learned to co-exist quite nicely.  We don’t always have to think of competition as a bad thing.  Even if that childcare competition is less.

Don’t Let Competition get you down!

What do you think?  Do worry about your competition being less than your rates? Please share ways that you keep your childcare business competitive in a comment below.