A common challenge we hear from prospects is that they are tired of ‘playing the price game’. What they mean by this, is that they are tired of being beaten down on price as the only true rating factor in their winning the new deal. This is the sad state of affairs when you have failed to understand how to position yourself out of a commoditized market. In this article, we’re going to explore two big picture ways to stop playing the price game.
One of the first ways to start adding value and start moving your margin upward is to change the experience the buyer has with you and your product or service. What I mean by this idea of experience, is to change the interactions around the process to add value to the experience around your product that the customer is willing to pay for. A simple case in point is to think about Starbucks. You are clearly paying for more than just a cup of coffee when you purchase Starbucks. The point here is that they figured out how to wrap the experience around the products. Here are a few questions to ask yourself:
- What experience can we add to the purchasing of our products that add value?
- Where do our customers feel the least amount of friction or the most amount of friction in the process?
- What added interactions or consulting are we currently giving away for free that we could monetize?
The second way in which you can add a margin to the sale is by using expertise. Some of you may have heard the phrase ‘experience’ or ‘expertise’ used interchangeably, either way, what we are basically saying here is that you know something of value more than just the product. You may have a good understanding of their industry or a deeper understanding of their true needs or the ability to see the future in their business.
This is high-value information the customer is willing to you pay for. In most cases we see this expertise giving away for free. Many of you might have grown up in a sales culture where this was the needed ‘grease’ to the sales wheel and you’ve been told explicitly to always give it away. So this will be a mindset shift that has to occur in your entire corporation to really benefit from this approach. But you as a salesperson or marketing person can start using this now and your ability to position yourself well in the market.
Think of the specialist doctor. Yes, there are some basics to surgery and medicine but if you have a real problem you’re going to go to a specialist because you appreciate their expertise. The same can be true in your business when thinking of you. Questions to think about:
- What questions do we get asked a lot that our clients seem to value our response?
- Do we understand something our clients fail to see only after making mistakes?
- If we were going to start our customer’s company, what would we do differently than what they are currently doing?
I hope these two points have given you some things to think about personally and with your team. Going from a commodity to a high-value product takes work, time, and effort.
But hopefully, as you’ve thought through these items, you’ve come across one important reality. You can’t sell experience or expertise to a price buyer. This will be the hardest part of the journey. You may need to become more discerning as a marketer or salesman, walking away from those buyers who do not see the value in your experience or expertise. This is OK. You must walk away from the small fish to fish for bigger fish. This will become a skill, almost a Jedi-like perception, of being able to understand a value buyer versus a price buyer. Someone who’s buying a price does not see the value in anything beyond the pricing. You may be able to convince them for 5% – 10% more but you’ll never make the astronomical leap you’re looking for from these types of buyers. I recommend starting early in the process of discovering if they’re buying on price value.
If you want to talk more about strategy around these topics, reach out.