If you are, you are very far from alone.
Most business people I have spoken to since the start of this year are saying that their clients and prospects are increasingly buying on price alone. It seems that everyone is looking for the lowest cost option and the general feeling is that it’s like swimming in treacle out there, i.e. you have to put in a lot of effort to get even just a little forward movement.
An industry that has been resistive so far to price-based decisions has been accountancy. People like to have a good relationship with their accountant and, up until now, they have been reluctant to change them for someone they didn’t know. However, many well-established practices are telling me that their clients are viewing their services as becoming increasingly commoditised. Many long-standing clients with matured relationships are moving their business to smaller, cheaper, less-well established practices or one-man bands and, in a number of cases, they are moving their accounting work out to India.
This inevitably leads to profit erosion and price wars were the practice or individual with the lowest cost base can under-cut everyone else and emerge the winner.
However, does it have to be this way in any industry? No, thankfully, it doesn’t.
In business, as in personal life, only about 20% of buying decisions are based on price alone. 80% of the time the company will value something higher than the price tag. If you doubt this, have a look around your client’s or prospect’s office the next time you visit them. If they are 100% price conscious then they’ll be using an old, second hand desk, a computer that is 10 years out of date and running Windows 98, an old re-conditioned mobile phone and you’ll notice out the window that they drive a 15-year old Lada.
So, if 80% of the time they value something higher than the price, why is it that prospects and even clients seem to want everything at the lowest cost?
This only ever happens if you allow your prospects or clients to judge your offering solely on its cost. The problem is that many industries, in the eyes of both clients and prospects, are becoming commoditised, i.e. prospects cannot tell the difference between the offerings being made by the various companies in that market place. If a prospect (or even valued client) can’t tell the difference between the offerings then the only factor they have in making a decision is price so they will inevitably go with the cheapest.
The way out of this predicament is to sharply differentiate your product or service by:
- Presenting it so that it aligns with your prospect’s values (appealing to a prospect’s values is far more effective than marketing based simply on features or benefits)
- Using a different marketing strategy and selling process to your industry norm.
Any business in any industry can and should do this.
If you would like some support in developing a differentiating marketing strategy which strongly appeals to your prospect’s values then please contact me about my one-day, one-to-one coaching and consultancy marketing sessions.
