How to Win Business
Without Cutting Prices
By Marsha Lindquist
people are motivated to earn commissions. So when they enter a sales
situation, they naturally think of money, and they think the customer
is thinking of money, too. Unfortunately, this money mindset often
causes the sales person to drop prices just to make a sale, even when
they don’t really need to.
when people buy things, they aren’t necessarily basing their
purchase on price, especially when making a decision on something they
really care about. For example, a consumer may not care where their
next toothbrush comes from, because they just need something to keep
their teeth clean for the next couple of months. But a person shopping
for an MP3 player, an infant car seat, or a lawnmower might research
several products before making the decision to buy one over the other.
Often, things like safety or reliability trump price during these
are looking at many factors besides money and wondering, “What
additional value can I get out of this product?” “How does this
spin off into other things I’m currently doing?” “How quickly
can I get it?” and, “How easy is the vendor to work with?” While
price may play a part in the decision to buy, your reputation as a
company and the value you add to your products or services are often
more important. So dropping price in a sales situation—before
investigating the customer’s true issues—isn’t always the best
decision a sales person can make. Rather, the sales person needs to
find out the customer’s real hot button. When you fail to find out
what makes your product or service special for that client, then
you’ll never be able to satisfy the customer’s requirement.
sales people dropping the price just to get the sale? If yes, then you
need to differentiate yourself from your competition beyond price.
When you aren’t focused on
delivering just a competitive price, your customers won’t view price
as an issue either. So rather than focus on what a person will or will
not pay for your product or service, you must focus on making a
difference. That’s what sets you apart.
use the following strategies to differentiate your product or service
beyond price and avoid becoming just another commodity.
a Culture of Creativity:
differentiating your product or service from the price of everyone
else’s allows you to see many things about who you are and what you
deliver. For example, if people look to you as a source of trust and
you drop your price, how can people really trust what you’re
providing? But when you focus on the benefits of working with you, you
remove price as the deciding factor. You begin to appeal to the
person’s real needs and wants, but you have to find out what those
become a commodity, you must engage your sales and marketing people in
making the differentiation. Both groups need to be involved; otherwise
you’ll always be a commodity. If you ask sales people to do what
they’ve always done, then they’ll go out and drop the price. But
if you ask them to participate in distinguishing your product or
service, then you’ll have a better chance of discovering your true
differentiation. After all, the sales people ought to know what the
customers really want because they are on the front lines. Your sales
people are in touch with the customers the most and really know what
your sales and marketing teams to share their ideas, crazy as they may
be, and reward people for bringing new ideas to the table. This open,
reward-based environment will bring out good and bad ideas, but
eventually you’ll have lots of good ideas that will help distinguish
you should reward every idea to encourage your team to talk about
everything that comes to mind. Then as time goes on and your
brainstorming sessions become more focused, you can be more selective
about the ideas you reward. Encourage them to get closer and closer to
your true differentiation.
mind, by creating this kind of environment, you’re asking your team
to take on new and difficult challenges that require them to think in
a different way. Essentially, you’re asking them to make mistakes.
But if you’re asking them to brainstorm your differentiation, you
have to let that creativity come through. So set up an environment
where their ideas can flow freely.
probably offer more than one product or service in your company. If
not, you’ve most likely considered expanding into new markets. But
when companies start expanding into new markets, they tend to deliver
example, everything Gore-Tex does revolves around that technology.
They use it to create a variety of waterproof fabrics that are used by
sporting goods manufacturers. But if they decided to expand into
something completely different from that product, such as fertilizers
or computer programming, then they would have a harder time succeeding
at it. If you try to expand beyond your area of expertise, chances are
you won’t be able to compete with anything other than price.
But if the
people at Gore-Tex decided to expand in other areas of the fabric
industry, they might have more success. If you expand into something
you can incorporate into the essence of what you do best, then
you’ll be able to distinguish your product or service on something
other than price.
company only marginally delivers a particular product or service, you
need to leave these things behind. These are the products and services
that become price driven. You should stick to the core of what you do;
otherwise you are out of your niche market. Then you lose money and
have to sell at rock-bottom prices. When that happens, your clients
won’t be happy, and you won’t be happy either.
Only What You Love:
strategy follows close in hand with doing your best, but is most
applicable to the delivery of your product or service. Doing only what
you love means delivering something beyond the product or service that
isn’t tangible. Your love for what you do shines through to your
customers and prospects. You are pleasant to work with and you pay
attention to details; therefore your service has more value and your
clients will be willing to pay more for it.
only do the things that bring you happiness. If you deliver anything
less than that, then your clients and prospects will reduce your value
down to the lowest common denominator. In other words, they reduce it
down to price because they have to put up with your negative attitude
and lack of caring. When you don’t love what you’re doing, people
can’t rationalize paying more for it.
do only what you love, then your best and your differentiation will
come through. If you don’t love what you’re doing, you’re
operating on the fringes and all you’ll have against the competition
is price. You won’t have a choice, and you’ll be nothing more than
Differentiation in the Future:
people often think of cutting prices to win business, when in most
cases, lowering price should not be the first card they play. While
price is important, people also consider a number of other factors in
their buying decisions. Therefore, you must differentiate your
products and services so you can address the real needs and wants of
your customers. When you use these strategies to differentiate your
products or services from your competition, you can win more customers
without reducing your prices.
Read other articles and learn more
about Marsha Lindquist.
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