14 Sep Is your marketing strategy compelling enough not to sell on price?
Posted at 10:22h
How many times have you been forced to discount your products or services in order to close a sale?
This practice can become especially costly at the end of a month or quarter.
Unless you are able to reduce costs in line with your price adjustments this policy can be the route to failure.
I’ve seen too many companies forced to sell on price when they aren’t the low cost provider. Why does that happen and how do you prevent it from happening to your organization?
First your sales strategy can’t be developed on it’s own. It has to be part of an organizational strategy
that starts with a clear vision and develops a marketing and sales strategy as an offshoot.
So how do you position your organization to not have pricing be a primary sales consideration?
There are several ways that I’ve seen work quite well.
1. Give them added value in addition to your product or service in the form of information or other services. When I founded my first company we developed a unique software system that tracked customer inventory throughout the shipping, receiving and repair process. We were a value added logistics company and were competing as a start up against some well known brands. The cost of development and maintenance of this system was considerable. But we chose not to sell it or charge our customer for use of the system. We developed interfaces to their internal systems, gave them a report generator and provided them useful information without additional charges. The costs were included in our transaction costs. The system provided them with real value allowing them to reduce inventory by as much as 60%. Initially we lost money on this marketing plan, but as we continued to add major customers, we were able to spread the cost over numerous accounts and were able to regain our investment. The best thing about the strategy was, it increased the competition’s cost to compete, and our customers rarely looked at price as the determining factor.
2. Be a solutions provider. Don’t sell your product or service on features, sell it on what problem it solves for your customer. This works well with small accounts that may not have large technical staffs to handle design or specification problems. But it may surprise you to know that it works equally well with large companies that due to layers of management and isolated departments can’t produce the solution quickly. What problems can you solve for your customer, or market? What sales ideas can you develop from those problems and solutions?
3. Become a thought leader. Use your blog to lead discussions, provide interesting articles and papers that address your market’s major issues. What are the issues that your customers are faced with? Provide valuable information and they’ll see you as the subject matter expert.
4. Create a strong UVP using one or more of the above. Use what you develop in 1 through 3 above and document a compelling unique value proposition. Make sure everyone in your organization, especially sales, understands it and buys in. When the discussion turns to price point out the value you’ve added as a factor in their total cost to purchase from you.
5. Make sure everyone in the organization understands, buys into and communicates the UVP constantly. Your customers won’t believe it if you don’t.