Alan Weiss tells a great story in his book, “Great Consulting Challenges.”
A national hair cutting chain moved across the street from a neighborhood barber shop and advertised $5.00 haircuts as an opening promotion. The barber’s sons advised him to cut his price to $4.00 to ward off the new challenge. Instead, he put up a sign that said, “We Fix $5.00 haircuts for $10.00.” According to Weiss, people loved it.
Now, I am not advocating you denigrate your competition, but when you find yourself up against predatory pricing, you do need to be prepared to defend yourself with a rock solid value proposition. Often, it comes down to quality of service, and the buyer needs to be made aware of the extra money he may be spending in related costs to support the “bargain.”
It is helpful to maintain a running checklist of all the costs associated with achieving the buyer’s goals and objectives including his time, his staff’s time and the risk that can be associated with settling for a low cost product or service. When you dig deeper, you can often find ten to twenty bits of additional service and value that you and your company are providing at no charge, which the low cost competitor either ignores or passes on later as add-ons.
Value is the real name of the game in selling and in buying. People will pay for value if it is communicated clearly and well.
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