On Being Price-Competitive

Many salespeople and marketers (myself included) write and speak regularly on the importance of selling on something other than price. Anthony Iannarino talks about shifting from price to cost. Grant Cardone speaks of being sales-driven rather than market-driven. Mark Hunter continually advises on how to sell a price INCREASE. And these are just a few examples of the prevailing notion from the producer's side of a market exchange: value always trumps price.

But do consumers feel the same way? Are buyers value-driven or price-driven. If you look at any end-consumer web listing of similar products, from books on Amazon.com to cars on Autotrader.com, they are typically ordered on the lowest price. That means that the first products people want to see are the cheapest. Rational or not, most consumers start with price.

Given this truth (if it is as true as I think it is), how can businesses survive? How can they resist commoditizing their offerings and sinking into "arms race" price wars with other businesses? The answer, I believe, is being price-competitive and creating value ON THE MARGIN.

The Internet and customer expectations have evolved in such a way that, as difficult as this is to say, you must be price competitive. Your car has to hit the first page on Autotrader or your book on Amazon. But that isn't the end of the story. You can't not be price competitive but you can't only be price competitive.

If you are looking at a particular book on Amazon.com, chances are there will be (depending on the book) 5-10 copies offered by different sellers for the same price. How do you choose the seller? Here's the kicker, the differentiation, the added value. Beside each seller will be a rating--a percentage of customers that gave the seller a positive review. After price, this is what book-buyers look at: reputation. It is the same thing with buying a car. You find a few cars that are priced relatively the same and then mosey on over to Dealerrater.com to see what people have to say about the dealers selling those cars.

True, you can't afford not to be price-competitive, but neither can you afford to be only price-competitive. When it comes down to you and the other guy, why should it be you? This is the question businesses, salespeople, and marketers today need to seriously ask themselves. After price is no longer an issue, what are you doing to earn your customer's business?