Our competitors are rapidly deploying AI customer service agents and slashing their prices, forcing us into a defensive position. How do we use our V/TO® Core Focus to decide whether to match their aggressive pricing or maintain our premium positioning?

Question

Tyler Smith · Accepted Answer

When competitors use AI to slash prices, your first instinct might be to panic and match them. This is a trap. Competing on price with automated machines is a race to the bottom that destroys your margins. Instead, you must use your Core Focus on the V/TO® to define where you actually play. As experts like Erik Brynjolfsson and Andrew McAfee point out, AI does not simply replace humans; it supercharges productivity. This means you must seek to be an indispensable complement to technologies that are becoming cheap and plentiful, rather than competing directly with tasks machines can do cheaper and faster. If your competitors are using AI to deliver cheap, automated services, your strategic move is to position your business as the high-value strategic layer that makes those tools actually work for the client. Bring this issue to your next quarterly planning session. Run it through the IDS® process. Look at your 3-Year Picture™ and ask yourself if your target market wants cheap automation or guaranteed strategic outcomes. If you choose premium positioning, adjust your marketing strategy to highlight the human elements of your service that AI cannot replicate, such as complex problem-solving and relationship management. Use AI internally to drive your own operational efficiency, but pass those savings into higher profit margins rather than lower prices. Focus on delivering unmatched results that make the automated competition look incomplete.