Salespeople 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 salesperson to drop prices just to make a sale, even when they don’t really need to.
However, 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 buying decisions.
Customers 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 salesperson can make. Rather, the salesperson 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.
Are your salespeople 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.
You can use the following strategies to differentiate your product
or service beyond price and avoid becoming just another commodity.
CREATE A CULTURE OF CREATIVITY
Further 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 are first.
To not 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 salespeople
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 salespeople
ought to know what the customers really want because they are on
the front lines. Your salespeople are in touch with the customers
the most and really know what they want.
Encourage 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.
At first, 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.
Keep in 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.
GIVE YOUR BEST
You 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 things marginally.
For 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
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.
If your 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.
DO ONLY WHAT YOU LOVE
This 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
You should 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
When you 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 a commodity.
YOUR DIFFERENTIATION IN THE FUTURE
Salespeople 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.
Marsha Lindquist is a business strategist, author and speaker. As
CEO of The Management Link, Inc., she has more than 20 years experience
as a business consultant who works with clients to transform their
organizations through her Value Advantage formula. She has enhanced
communication, facilitated change management, and improved overall
strategies with companies including BP Amoco, Fleishman Hillard International
Comm., and Northrop Grumman. For more information, please visit: www.marshalindquist.com
or e-mail: Marsha@MarshaLindquist.com.