Forget about Going Lower to Capture Frugal Buyers
June 25, 2019
Editor’s Note: This guest post was contributed by Julie Thomas, CEO of ValueSelling Associates.
Another quarter or maybe fiscal year is coming to an end, and if your numbers are lower than expected, you may feel pressured to offer reduced pricing to reach your quota. Before turning up the discount dial, consider alternatives for turning prospects into buyers — without stooping lower on price.
Instead of adopting a sales strategy focused around price, make it all about value. This strategy works even if you are selling similar products in a crowded marketplace. Sure, everyone loves a bargain. Savvy B2B buyers, though, also understand that you get what you pay for. They consider more than price before making a purchase.
Companies with higher price points win business away from low-cost providers by leveraging the power of differentiation. They know how to position themselves apart based on a prospect’s unique needs. The trick is to show a prospect how your solution is uniquely qualified to resolve their business issue better than any alternative, so that your solution is the best choice, regardless of how much it costs.
For this approach to work, you have to know where your offering differs from the competitors. This doesn’t necessarily require a competitive analysis. At ValueSelling Associates, we have found there are four major categories you can cue up before relying on pricing as a differentiator.
1. Focusing on Features that Fit a Unique Need
This accounts for the largest degree of differentiation, regardless of an industry, and is typically what product education focuses on. What features, functions and deliverables do your B2B solutions provide that are ideal for a particular prospect? How are these an improvement over what already exists in the market or within the company? Can you cite specific customers who’ve seen quantitative improvements since adopting your products or services? These brief stories will stick with the prospect, especially if they were battling similar business issues.
2. Offering More Favorable Terms and Conditions
If you’re in a crowded field or your solution is now commoditized, you may distinguish yourself by offering more favorable payment terms or extended product warranties. Limited-time money-back guarantees can sweeten the pot, particularly for wary prospects not fully convinced your product will work.
3. Saving Time, Delivering Convenience
Time equals money, especially if a company lacks internal resources for anything but a quick deployment. How easy is it to implement your software? How fast can you add hardware to an existing network? Do you offer on-site services to ensure everything is properly configured and secured before going live? And are these services free (unlike the competitor)? Does a contract come with 24/7 technical support online or over the phone? Is there free training for users? Ask anyone who’s installed freeware and then couldn’t get support when they needed it. They’ll say the true costs of ownership were much greater than anticipated.
4. Providing a Higher Level of Assurance
Here the advantage typically goes to industry leaders with a proven track record of delivering quality goods and ongoing support. If you are a startup without a strong client list, tout the expertise of your staff to assure prospects of your solutions’ durability, flexibility, security and any other highly-sought feature or function. Most B2B entrepreneurs were first successful somewhere else; that’s why they went out on their own. They also tend to bring solid talent with them. Leverage that expertise to quell any concerns about the lack of long-term successes.
All of these value-adds may convince a prospect that going with your company is the best option. Especially if, in the course of a conversation, you can show how your vision for success and your prospect’s vision match. This is where differentiation makes all the difference. Being known solely as a low-cost provider should never be your goal. Instead, strive to be known for providing the best value for the price.
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