Win Business Without Cutting Prices

By Marsha Lindquist

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 it’s not necessary.

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 looking for call center services might research several companies or different options before making the decision to buy one over the other. Often, things like quality or reliability trump price during these buying decisions.

Customers are looking at many factors besides cost 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 call center and the value you add to your services are often more important. So dropping price in a sales situation, before investigating the prospect’s true issues, isn’t always the best decision a salesperson can make. Rather, the salesperson needs to find out the prospect’s real hot button. When you fail to find out what makes your 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 they are, then you need to differentiate yourself from your competition beyond price. When youaren’t focused on merely delivering a competitive price, your prospects won’t view price as an issue either. So rather than focus on what a person will or will not pay for your service, you must focus on making a difference. That’s what sets you apart. You can use the following strategies to differentiate your service beyond price and avoid becoming just another commodity.

Create a Culture of Creativity: Further differentiating your service from the price of everyone else’s allows prospects 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? 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. 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 prospects 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 many 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. 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 service in your call center. If not, you’ve most likely considered expanding into new markets. 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. 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 price.

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 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 service. Doing only what you love means delivering something beyond the service that isn’t tangible. Your love for what you do shines through to your clients 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 it.

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 for it.

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 services so you can address the real needs and wants of your clients. When you use these strategies to differentiate your services from your competition, you can win more clients without reducing your prices.

Marsha Lindquist is a business strategist, author, and speaker, with over 20 years experience as a business consultant. For more information on her speaking and consulting work, email Marsha@MarshaLindquist.com.

[From Connection Magazine September 2007]

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About Peter DeHaan

Wordsmith Peter DeHaan shares his passion for life and faith through words. Peter DeHaan’s website (http://peterdehaan.com) contains information and links to his blogs, newsletter, and social media pages. Peter DeHaan is the president of Peter DeHaan Publishing, Inc., (http://peterdehaanpublishing.com) the publisher and editor of Connections Magazine and AnswerStat, and editor of Article Weekly.