Dangerous Phrases: “We must beat them on price”

All too often I hear companies say that the thing they absolutely must to do overcome competition is beat them on price.  The logic being that if we’re the cheapest then we’re the ones the customer will choose, right?

Generally speaking, and unless everyone you are competing against is offering a 100% identical product to you, this simply isn’t the case.  People are looking for value as much as they are a good price.  In the public sector most large deals go through a formal procurement process but, even then, price will only make up a certain percentage of the score.   Customers tend to use the MEAT criteria (Most Economically Advantageous Tender) which also takes into account quality.

So instead of making price the thing you must beat them on and the focus of your efforts, why not try highlighting some of the other things that stand you apart instead.  For example:

  • Are you greener or more ethical? Is your product/service locally based or locally made.  Equally, is your service UK-wide or international?
  • Is your product of a higher quality, built to last, easier to use, safer to use or approved by a respected organisation?
  • Are your staff experts in their field, do they come from industry, are they a large, happy and stable team offering fabulous service, do you offer longer more flexible opening hours and online help?

At the end of the day cheapest rarely means best.  Aim to price your product or service at a price-point that truly represents what you offer and then focus your attention on delivering all the added value your customers will love.

 

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