The price vortex is time-consuming. It is easier to do a strong job at the beginning of a selling process than find yourself spending it at the back end of the process trying to protect margin.
The reality is when you are unable to differentiate through design thinking in sales or by providing a unique solution, you are likely to be commoditized by your prospect or customer.
There are 3 reasons why your prospect will commoditize you and therefore be focused on price.
- Your product or service is perceived as being the same as the competitors.
- Your prospect is having difficulty connecting value your product or service provides to their business drivers.
- Your prospect is not clear on the problem that needs to be solved.
Ultimately if a prospect cannot measure the value they will bargain on price.
Here are 3 strategies to avoid being commoditized:
- Help your prospect or customer to see the active connections between your solution and their business drivers.
- Quantify the impact of your value in financial terms. For instance, if you inventory what they need, what is the actual cost to them if they buy from a competitor and do not receive the product on time? What is the cost if their end customers’ lines go down or the project is delayed by a day? Identify both the hard and soft costs.
- Ensure you create contrast. Help the prospect or customer to see a difference between your solution or company and the competitor. Before and after advertisements are used frequently because they work. What kind of comparison can you depict?
Being able to help your prospects measure your value can save you time, increase your total sales volume, margin and conversion rates. And most importantly, reduce the time you spend in the price vortex.
