Price vs. Value

“Price is what you pay, Value is what you get” – Warren Buffet 

Think for a moment about the last major purchase you made.  Did you purchase strictly based on the price? Did you purchase based on it being the “cheapest”?  Go a step further and ask yourself; do I wear the “cheapest” clothes? Do I live in the “cheapest” house? Do I drive the “cheapest” car?  If you really think about it, there is a high probability that the answer is unequivocally no!  

Are there things that are sold based solely upon price? Absolutely!  However the majority of us don’t buy on price alone.  A recent study conducted by a major university revealed that buyers want more than a “cheap price”. In fact, only 1 out of 6 buyers are true price shoppers. Is price therefore unimportant? Certainly not! However, price is rarely the best basis upon which to present a buying decision for your products and services to your customers. 

So how is your business positioned?  Is your business model to offer the lowest price or is it to offer value based on the given needs and requirements of your clients?  If it’s price then sell on price. But remember, price selling makes it a commodity and a commodity by definition means there is no differentiating qualities or characteristics from competing offerings.  Does your company offer quantifiable differences between your products and services and your competitors offerings?  If so, what are they?  Have you identified and documented what value-added benefits your company offers?  Being a value-centered organization begins with understanding the true value that your product or service offers. Every organization, no matter how large or how small, has a unique value proposition. Spend the time to create a lsit the value you and your company provide. Are you offering things like your knowledge and expertise, product performance and quality, service and support? If you do, then let your clients and prospects know what that value is. Match your value up with your client’s needs and requirements and you will be more successful in the long run. 

Understanding of your customer’s business, challenge areas (pains), culture, and business objectives for the future is essential if you want to move away from the price discussion. Even in today’s marketplace, you can still be a solid competitor without being the cheapest. Change the scope of the conversation. Focus on the value that your company offers and price will take care of it self.

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Categories: Sales

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