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But, There Is No Opportunity But To Be Cheaper . . .

Yesterday’s post (You Will Die By That Same Sword) elicited a number of responses (pricing and cold calling posts always do). One comment (a tweet, actually) suggested that price is the only thing that you can sell.

Whoa! I know pricing isn’t easy. Buyers have more power than ever, and there is still a lot of downward pressure on margins, for sure.

Read this carefully and take some time to think it over before you fill my inbox and the comment section with all of the reasons as to why you can’t do anything but be cheaper.

Regardless of what you sell, you can sell something more than price. Period.

A Bit of Overwhelming Evidence

Apple sells the very same thing that Hewlett-Packard sells. Apple sells the very same thing that Dell sells. Apple sells the very same thing that Research in Motion, Samsung, and Acer sells.

The parts, the components that make up a computer, an MP3 player, or a smart phone are the same parts. It’s a little metal, a little plastic, a few boards, a few chips, and some glass. They are all made of silicon. All of the stuff Apple—and their competitors—make is a essentially a few hundred bucks worth of extremely common parts.

“But wait,” you say. “Iannarino, that’s Apple, man. We can’t be Apple. They’re special.”

And special they are. That’s what makes them worth paying more to obtain and worth more as a company. Want something less sexy?

Starbucks sells coffee. Yes, it’s just coffee. They sell a lot of coffee that’s mixed with the strangest and most unique substances on earth, like milk, chocolate, and whipped cream. Sometimes they use super high tech equipment like blenders to make iced versions of their drinks.

And, they have a logo!

There are a lot of other people that sell coffee, but none of them are Starbucks. And, with apologies to Mr. Schultz, some coffee shops are better than Starbucks ever dreamed of being, like Intelligentsia. Because Starbucks is special, they can get more for a cup of coffee than almost anyone else.

But both Apple and Starbucks sell commodities. Both believe they are special, and both work to create value outside of price (way outside of price).

But, I Could Never . . .

I could go on and on with countless examples, but I don’t need to. If you are a commodity, you chose to be a commodity.

“Iannarino, you are so, so very wrong. I sell ____________. There is no way I could sell anything but price.” I’ll let you fill in the blank. But here is the cold, hard truth, for those who are willing to face it:

The idea that everyone gives the most weight to price when buying whatever it is you sell is simply wrong. Some of your target market buys price, because that it what they value most of all. Maybe they are into operational efficiencies and they have to have the lowest price because that is their strategy. But many more would pay more to receive more.

But, You Could . . .

Maybe you sell computers and equipment. Maybe you think price is the only factor being used to decide where to buy, especially since anyone can simply shop the Internet and compare prices. But if that’s is what you think, it’s a choice you have made. You have chosen to believe that you have no ability to create or deliver any other value around their purchase.

This is anti-Jobs and anti-Schultz thinking.

It’s not true. You could do more, and you could be more.

You could be the alternative to lower price. You could be the people that sell better service and a better overall value. You could be high touch.

You could be the people who get to know their clients and their businesses, building plans that help them address their future needs. You could be the people who help them think strategically about their future purchases. You could be the people that save them money (lower cost) by helping them shape and build their future technology needs on how they create a competitive advantage for their clients or customers.

You could be the people companies trust when they really need results from their technology, not just boxes and wires. You could link what you sell to how your clients create value for their clients. You could link it to the idea that the advantage you bring is that you help equip your clients to deliver better service to their clients and customers.

What could you be? You could be whatever you wanted to be to be worth more. You could be the computer provider your clients needed you to be. Would you have to work a Hell of a lot harder? You bet you would.

Would you have to have a vision? Yes! Would you have to something better to offer, something remarkable? Indeed you would.

None of this easy, and nothing worth doing ever is.

Lest you salespeople think that this post is for CEO’s and the heads of companies, be warned: this is for salespeople, too. You can create more value than your competitors, and you yourself can be a differentiator that makes you and your company worth paying more to obtain.

Lately, I have seen a flight to quality, led by companies that sell better results than their competitors. Lowest price often has a higher cost.

Questions

Who decides whether you are a commodity?

Who controls the strategic choice you make as a business?

Are there people in your space who have higher prices, higher margins? What do they believe about themselves and what they do?

Do you personally always buy the lowest price, even when something is a commodity?


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Comments

comments

  • David Searns

    Great article Anthony, and I completely agree that price is not the easiest thing to sell (actually it may be the hardest since some competitor will always offer what you sell for less).  However, I think your examples ignored a key point – customer experience. Apple and Starbucks don’t just sell a higher priced product because they are higher touch or as you point out better products. But they do offer a better experience. Apple’s experience is based on product quality, design, the integration of hardware and software, and the policies by which they treat customers. Starbucks is based on their approach to the coffee experience.  Unfortunately, the typical sales person can’t influence the experience his or her company delivers. This requires more of a commitment from senior management to creating a better experience for the sales team to sell. I think it’s the marketing department’s job to define what the experience should be, then work with operations, service and sales to deliver it.  Organizations that do that will give the sales team a lot more to sell than price!

    David Searns
    Haley Marketing

    • http://www.thesalesblog.com S. Anthony Iannarino

      Thanks for sharing your thoughts, David. Mostly, I agree. 

      I didn’t say that Apple or Starbucks have a better product. I know as many people that hate both Apple and Starbucks as I do people that love them. The experience is the difference; they are creating value in a way that differentiates and defines them, and it pulls them out of the commodity trap. That said, they work hard to sell a what are still commodities at premium prices. It’s evidence that it is possible for anyone who is willing to work hard to do the same, and I could list dozens more examples. 
      As a side note, I once had a strategy professor tell me that if Apple couldn’t achieve more than 5% market share in computers that they failed (despite my argument that that number is about the same market share BMW enjoys). 

      I couldn’t disagree with you more (or more violently) on the salesperson’s ability to influence the experience. Every employee has the ability to influence the experience–especially the salesperson! I believe this with every fiber of my being, and I know it to be true from experience. And so do many salespeople (just ask them and ask some of their clients why they stay with their firms).

      Is it easier to deliver a consistent experience with a commitment from senior management? Sure. Is it better if the organization is aligned behind that goal? Absolutely. Should you wait until everything is perfect to make sure that every interaction and engagement you are involved in is as powerful as it needs to be? No way! 

      A

      • David

        Can’t argue with your points that sales influences the customer experience.  My point was that without a company wide commitment to experience, the great experience the sales team delivers will flat on service delivery.  That, in turn, will likely lead to customer dissatisfaction, which makes it very difficult for the sales team to have long term success.  For example, you’re in the staffing industry. If you provide the employer with a phenomenal experience in defining staffing requirements and taking the job order, and then the recruiters supply lousy talent, the overall customer experience is negative. And no amount of great sales effort will fix lousy recruiting.  That’s why I wrote that customer experience must be a company wide initiative. 

        To your point, when the actual product delivered is truly a commodity, then I agree that the sales experience can be the differentiator.  However, few products are really pure commodities, and managing the remainder of the customer experience is equally essential. For example, if Apple didn’t have great design, would they be as successful?  If Starbucks didn’t have incredible distribution, would they?

      • David

        Can’t argue with your points that sales influences the customer experience.  My point was that without a company wide commitment to experience, the great experience the sales team delivers will flat on service delivery.  That, in turn, will likely lead to customer dissatisfaction, which makes it very difficult for the sales team to have long term success.  For example, you’re in the staffing industry. If you provide the employer with a phenomenal experience in defining staffing requirements and taking the job order, and then the recruiters supply lousy talent, the overall customer experience is negative. And no amount of great sales effort will fix lousy recruiting.  That’s why I wrote that customer experience must be a company wide initiative. 

        To your point, when the actual product delivered is truly a commodity, then I agree that the sales experience can be the differentiator.  However, few products are really pure commodities, and managing the remainder of the customer experience is equally essential. For example, if Apple didn’t have great design, would they be as successful?  If Starbucks didn’t have incredible distribution, would they?

      • David

        Can’t argue with your points that sales influences the customer experience.  My point was that without a company wide commitment to experience, the great experience the sales team delivers will flat on service delivery.  That, in turn, will likely lead to customer dissatisfaction, which makes it very difficult for the sales team to have long term success.  For example, you’re in the staffing industry. If you provide the employer with a phenomenal experience in defining staffing requirements and taking the job order, and then the recruiters supply lousy talent, the overall customer experience is negative. And no amount of great sales effort will fix lousy recruiting.  That’s why I wrote that customer experience must be a company wide initiative. 

        To your point, when the actual product delivered is truly a commodity, then I agree that the sales experience can be the differentiator.  However, few products are really pure commodities, and managing the remainder of the customer experience is equally essential. For example, if Apple didn’t have great design, would they be as successful?  If Starbucks didn’t have incredible distribution, would they?

  • http://www.marvinleblanc.com Marvin LeBlanc

    Anthony,
    Great Post.  I agree that when it comes to sales people are buying more than price – they are buying you, your brand, and your company. Good business happens with good business PLANNING and great sales happen with great sales PLANNING.

    • http://www.thesalesblog.com S. Anthony Iannarino

      No doubt, it does, Marvin. But it’s difficult, and so, price is easier to sell. 

  • http://PeterFuller.org/ Peter Fuller MBA

    Who decides I am a commodity?

    I do, and I am not a commodity :)

    • http://www.santhonyiannarino.com S. Anthony Iannarino

      Right on, Peter!