Are you Value Priced ?

“Your prices are higher than the competition”

How often do we get confronted with this statement? What should our response be?

Let’s say our widgets are 20% higher price than another supplier and we encounter the customer pushback. Most people understand that we need to explain the differences because we usually aren’t comparing apples to apples. In this example, if our widget lasts 30% longer than our competitor’s widget, then their price is actually higher than ours and we can present that calculation. Certainly, we readily understand these comparisons throughout our enterprise, but what if it were the other way around and our price calculation is actually higher?

This is when we need to consider that pricing is only one component. The objective is not to reduce prices so that customers no longer raise questions; usually that’s a race to the bottom. Our aim should be to formulate and deliver the appropriate response to their questions and concerns. This is where it becomes crucial to develop a confident response that demonstrates the organization’s Value Proposition. We need our customers to know about the things that add value to their partnership with us. And they need to know it exists at all levels.

Organizations can start by thinking of all the great services they offer, and all the quality aspects of products and how they help position the customer for greater success. From here you can develop simple, memorable and impactful value statements that tell the story around each advantage point and build them into a total value proposition. It is good practice to gather supporting information from a number of sources like internal focus groups, brainstorming sessions, employee surveys, customer surveys, competitive publications and vendor interactions. Every level of the organization should participate in gathering the information and in crafting the statements and stories. That level of collaborative effort helps to ensure ownership and authenticity of the statements and stories throughout the organization.

The entire group should become familiar with the value proposition of the organization, how it fits with customers’ needs, and be able to clearly articulate it. There should also be an understanding of how and where it fits within each business unit and how each of theirs fits within the organization as a whole. This ensures healthy cross promotions and a show of solidarity within the organization; both advantageous to the business and customer partnership. It is also a good way to improve internal relationships across your organization.

Maintaining awareness through customer feedback and other industry indicators, along with internal intelligence points, the organization’s value proposition can strengthen over time. It becomes the foundation for prosperous initiatives that lead to many mutual success points. There is so much more to sell than we may think, but with a few easy steps, organizations can begin to leverage some powerful discoveries!

If you’d like to discuss how we can assist you and your business, get in touch with John Higgins, the author of this article, at jriley@scpg.ca