Trying to compete on price is a fool’s game. Undercutting your competitors or discounting to secure a sale erodes your margins and in the end, isn’t good for either you or your customers. This is well understood which is why sales teams focus heavily on selling value rather than selling on price. After all, if your customer is questioning the price then they haven’t been sufficiently sold on the value.
Nevertheless pressure mounts, maybe you are coming to the end of your reporting period and haven’t yet hit your target or it’s been a while since you had any sales at all. It is understandable then why salespeople do what they do.
As a sales manager or founder, you can begin to question your whole value proposition if customers are saying no or appear to be purchasing based purely on the price you may be tempted to ditch the value approach altogether.
Competing purely on price, however, turns your product into a commodity that devalues your brand and the work of your teams. So, what should you do?
Provide a more detailed value proposition.
Instead of surrendering to price create a more credible story around your value proposition.
Define the cost of no action. If they don’t buy your product or solution what is the cost to them ongoing. Inaction has an economic cost that is likely greater than the cost of your product.
Focus on telling the story of the problem and your solution from the perspective of your customers.
Tailor your value proposition to the roles you are speaking to. Different people value different things. Everyone wants to know how it benefits them.
TAKEAWAY: Don’t surrender and go down the slippery slope of competing on price. Instead, review and revise your value proposition and how it is delivered for opportunities to improve the value your customers perceive they are receiving.