Beating Lower Priced Competitors
I read an interview with a very well known sales pundit on the “6 Ways To Beat Lower Priced Competitors.” At the end, I sighed, thinking, “How can some of the ‘best in the world’ continue to get things so wrong.”
There were six items listed, without knowing them, you can probably guess, they are the old stand by’s taught in every Sales 101 course. In certain situations, some may be valid–but that’s not my point. Whether they are right or wrong, is not the issue. How we determine what is important and differentiated is what’s critical and how we win business.
What does your customer care about? What’s important to them, why? What do customers value and why?
Until we understand what customers value, we have no way of presenting the value of our solutions or no way to create differentiated value. Until we determine what customers value, we have no context in which to create or build value.
So how we differentiate and how we leverage our differentiation must always be based by understanding, prioritizing, and quantifying what our customers value. Absent this, we are guessing, and we are wasting our customers’ time in trying to present our differentiation.
Price will always be an issue with customers. When all else is equal, the only differentiator is price. If we let everything else be equal and we aren’t the lowest priced provider, then we deserve to lose.
But everything else is never equal. The low price competitor can only compete on price. The low price competitor has probably not invested the time in understanding what customers value, in helping the customer discover value, in helping c0-create or construct value.
So for those of us who invest in these elements, we are actually tremendously advantaged over the competitor that can only compete on price. We know all the other issues the customer cares about. We have helped them discover what they value, together we have built value through the buying process. It’s likely the low price provider hasn’t done this and doesn’t know (frankly, they can’t afford to invest in those activities). So they are really disadvantaged, and great sales people know how to leverage this.
Great sales people know that everything else isn’t equal and they strive to tilt everything to their favor, choosing to differentiate in ways that are meaningful and impactful to the customer and their success in achieving their goals.
So beating lower priced competitors can be very easy, if we are doing our jobs in how we engage customers. If we understand what they value and how we deliver value in each area. If we help them discover what they should value, if we are working together to create value, we have changed all the rules in how the customer makes their decision. Their decision will be based on getting the best price for those things they value. If no one else has done this, then they aren’t even in the ball game, and whatever their price is, becomes irrelevant.
Stated differently, even free is too expensive if it doesn’t directly address and deliver on those things the customer values.
It’s really not that difficult, and if we do our jobs right, the customer tells us every single time. If we are top performers, we help the customer further by shaping and creating distinctive value, further distancing us from those who are clueless but can only say, “Buy my product because it’s cheapest.” They can’t say, because they probably don’t know, “Buy my product because it delivers on the value that’s most important to you.”
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