Do You Sell Price Or Value?

A while ago I attended a seminar where a very wise man said, "Remember this, never again will you have a long term competitive advantage in product or price." As I said, this was some time ago with very different market conditions. Today the marketplace has changed with extremely intense competition, in comparison. Those in our industry are finding, that because of the decreased number of available projects, they are forced to cut prices and margins to get any work and keep their doors open. They soon find themselves participating in the "no-win" game of price competition. Why "no-win". Please refer above to my opening statement.

How do you say I don't want to play this game anymore and make it work? You have got to sell value - not price. It's scary and not easy, but it's the long term solution. In survey after survey, over the last thirty years, price always comes up sixth or seventh in importance in the purchase of a product or service. Then why does it always seem to come up? Number one: because you haven't established the value of your product or service, and number two, it's the easiest aspect to focus on. But do your clients really want the cheapest they can get? I doubt it. As another wise man once said, "the bitter taste of poor quality lingers long after the allure of a cheap price fades." What they want is a good or fair value for their money.

To establish that value in the client's mind don't focus on price. If you do, the client will too. Focus on what you or your company can do to fulfill the client's needs or solve his problems. Most people will be more than willing to pay a fair price if you can solve their problems. Secondly, if your price is too low, the quality of your product or service will be suspect. In a recent survey of our own client base, price was a distant fifth in importance after quality, responsiveness, on time delivery and problem resolution.

Finally, people buy from people they like and trust, regardless of price. Establish relationships with your clients that puts them first, and watch your value and profitability soar.

Dave Janosz

Marketing Manager

Custom Components Company