Stop Competing on Price: 5 Tips
I was recently asked, “What word would you like to see eliminated from the healthcare industry?” I chose the word “cheaper.” And because I’m not a whiner who just brings problems, my solution is this article.
Let me tell you a story: I recently received a LinkedIn connection request from the CEO of a company. He was reaching out to connect because he “thought we could both benefit.” When I responded and thanked him, he asked if my company offered medical benefits. Strange. So, I looked at his profile a little closer. Turns out he was a competitor to one of the services we provide - seems he was randomly connecting to sell direct to employers. So, I quickly explained that we were in similar businesses, gave a quick overview of what we did, our differentiator, and thanked him again. His response floored me: “I wish you were selling our service instead and then your prices could be much lower.” AKA: cheaper.
While that was officially the end of OUR conversation, it continued on in MY head all day! “Who does this guy think he is? He doesn’t know jack about my business. Is price the only way he can sell his product?” In the Little Red Book of Selling, Jeffrey Gitomer says, “…figure out where your value proposition lies AND how to communicate it in a way that the customer will get it AND be so compelling in your proof statements or your testimonials that the customer will both emotionally and logically make the decision to buy from you.”
I never wrote back to that guy, but here’s the 5 tips that came out of my experience…
1. Know who your client is…really!
As a marketer, one of the key things I’ve learned is to define your business. I love this article that includes a Defining Your Business Workbook from Q4intelligence because your answers to the questions posed in the Workbook will impact all your downline business decisions. One of the most important questions is “Who is your target customer?” You can’t be all things to all people or you’ll end up being nothing to everyone.
This is about more than demographics (i.e. employers with revenue $2 to $10M in the Detroit area). When we started freshbenies, our customer was anyone who would buy from us. Over time, we crystallized our target customer based on who needed us most, who was most profitable and who we really wanted to work with.
If you haven’t already, work with your team to complete a Client Persona: click here for a great article and template. This is a few-page document that “puts a face” (and a name) on your target customer(s). We constantly refer to our Personas as we’re making business decisions.
“Does that make the process easier for Foster?”
“Is that how Fiona would expect the system to work?”
“Is that the best way to help Bonnie with her issue?”
Amazon is so serious about this that they hold a chair in every meeting for their customer. It’s important to get crystal clear on this because WHO YOU SERVE will drive EVERYTHING you do in your business – including this…
2. Understand and communicate your client’s true problem
We recently went on a journey to review our freshbenies messaging and we used the Neuromarketing concept. Neuromarketing is a field of marketing that uses medical technologies to study the brain’s responses to marketing stimuli.
One of the key steps in the Neuromarketing process is to “diagnose the pain.” Tactically, we had 4 people from our company brainstorm the pains our different clients experience with the healthcare system and employee benefits. In the end, we filled five flip chart sheets that had nothing to do with a client thinking our prices was too high. The goal is to then use these insights to create messaging that makes your prospect say, “These people understand me. They understand my problem. They feel my pain”
If a company SO well explains the issue you’re having, aren’t you more apt to think their solution will work for you? Aren’t you more willing to pay a little more knowing the problem will be solved. Answer: YES!
3. Provide something truly different…that your key client really wants
I get that, as the cost of employee benefits are skyrocketing, every dollar counts. I get that employers are constantly looking to save on their benefits costs. But, is it REALLY the only metric that matters? As industry leaders, what advice, tools, strategies, products, ideas do you offer that bring true value to your clients – extras that aren’t commodities and can’t be measured in a side-by-side bid. Then, become an expert at communicating that value in a compelling fashion via your marketing and sales processes.
If the only message you’re projecting to your clients or prospects is about how you can save them money, come up with something better. If you don’t have anything better, as a business owner, it’s your responsibility to GET something better that solves your clients’ true pain and sets you apart. OR you can just keep stressing about how your entire business is dependent on prices staying low.
4. Deliver, deliver, deliver
I shouldn’t have to mention this, but since I’ve personally experienced sucky execution after purchase, it bears repeating: it’s not enough to SAY you’re good at what you do. You must deliver…consistently.
How many times has this happened? You’re looking for a certain product or service. You find a company with a message that connects and you like their compelling value proposition. Then, you have a great conversation with their salesperson. You’re excited to move forward, so you buy. Post-sale, everything turns to crap: you have a tough time getting someone on the phone, they take 4 days to return an email, the processes are complicated, the product doesn’t work like it was supposed to.
You must DELIVER consistently on your promises and always look to make the client experience better. Think about it: if your post-sale experience is well above your expectations, are you going to search somewhere else for a lower price? This brings me to my final point. Doing point #4 well helps you…
5. Build your reputation
To me, this happens in a couple ways: 1) be a thought-leader, and 2) excel at points #1 – 4 above which drive referrals from clients who love you. Being a thought-leader helps you get more leads, while referrals help you convert more new clients.
Great – not average - speaking and writing are two sure-fire ways to position yourself as a thought-leader in your industry. Speak at events where your potential client will be, at industry conferences where you can show your know-how, etc. Write articles in your area of expertise for your own blog, for industry publications, for local organizations, etc.
Bottom line: people will pay more to work with thought leaders who have a good reputation because they know they will have a positive experience working with you.
Most businesses compete on price because it’s easier. Properly implementing the above points takes time, money, strategy, and mental energy. It’s always easier to be a one-trick pony than to develop your business into something remarkable. But it’s the only way to long-term success in business. And, it’s totally worth it!
Now it's your turn! What strategies are you using to compete? Are you considering it? Comment below or drop me a note to email@example.com!