If you think I’m asking about your organization’s capabilities, I’m not. Then where, exactly, does the ability to add value lie?
In your customer’s mind. I’m constantly amazed by how many companies expend time, energy and resources trying to "compete" in markets in which they have no opportunity to add value.
Business to business
In the B2B sector you have OEM (original equipment manufacturers) suppliers undercutting one another’s price to get business from companies that dictate specifications and choose the lowest price. How can you possibly add value (value that translates into higher prices) if you don’t have any input into the specifications?
A similar situation appears in the construction industry. Many general contractors dictate the standards to subcontractors and make their choice on the basis of the lowest price.
It’s no different in selling to consumers.
Business to consumer
The OEM folks and general contractors are no different than retail and service customers who make their buying decisions solely on price. At a recent conference an audience member stated, boldly, that he regularly visited retail outlets to research his options, then bought online to get a cheaper price, often from other retailers.
Moral of the story
Whether you’re selling B2B or B2C, these types of customers prevent you from adding value. So the next time you’re considering a new market ask yourself “Will the customers in this market allow me to add value?” If the answer is ‘No,’ then move onto a market where you can.
Makes life a whole lot simpler, doesn’t it?
Dale Furtwengler is a professional speaker, author and business consultant. His latest book, "Pricing for Profit," is dedicated to helping organizations break the bonds of industry pricing.