Stop Competing Against Transactional Value

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

If you are competing by creating a higher level of value, then you can’t try to compete against lower levels of value and the accompanying lower price.

You don’t need to win the battle over product or service (Level 1 Value Creation). You don’t need to compete and win feature by feature and benefit by benefit. You only need parity here, and you may not need parity if you create enough value that you can lose on some features and benefits. BMW isn’t big on cup holders.

You also don’t need to win a contest over experience (Level 2 Value Creation) in business-to-business sales. Again, here you only need parity when it comes to service, support, and customer experience. The experience that you should be worrying about is the experience you provide as a salesperson (and that’s Level 4 Value Creation).

It used to be that tangible, measurable business results differentiated you in B2B sales. Now, it is table stakes (Level 3 Value Creation). It doesn’t hurt to have a better return on investment, but I’ll bet you never get a look at your competitor’s; you’ll likely only receive feedback that they have a lower price.

If you are competing by creating the highest level of value for your clients, you will be focused on collaborating with your clients around creating the biggest, most value-creating solution. You will be proactively presenting ideas that help your client build a future-oriented platform from which to produce even greater results. The solution you create together will be tied to their most strategic initiatives. And, you will be side-by-side in the foxhole with your client, ensuring what you build together produces the promised results.

If you are going to create this higher level of value (Level 4 Value Creation), you can’t compete on price. You aren’t competing by creating transactional value, and your competitor is going to have a lower price (Period. End of story). You only win by selling greater value, not by competing on price.

Big, strong value beats skinny, weak transactional.

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Filed under: Sales 3.0, Transactional, Value

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