It’s easy to focus on pricing your offering to win your dream client’s business. You consider what your dream client believes they need in the way of pricing, and you consider what your competitors are likely to quote.
When you consider what your dream client wants in the way of pricing, you end up dealing with their desire to have better, faster, and cheaper, an appealing idea that your competitors have been selling them for a long time. The lie that this is possible is why so many people still distrust salespeople, but they still hold onto the dream that merely switching partners will allow them to realize this dream (which might be more accurately described as a hallucination).
When you consider your competitor’s pricing, you end up in all kinds of trouble.
First, you have no control over what they offer. The problem with competing with someone who is willing to destroy themselves to win the business is that they are willing to go someplace you are unwilling to go. Trying to match them only means you destroy yourself instead of allowing them to destroy themselves. It’s a poor strategy.
Second, your competitor’s price has nothing to do with the value that you create. You have to price your offering based on the value you create, and if you create more value, you have to capture more value. Which brings us to the truth of this issue.
You have to price your offering to execute for your dream client. Your price needs to ensure that you can—and will—deliver the outcomes that you sell. It doesn’t help you or your dream client to price your offering to meet their expectations if it doesn’t allow you to deliver the goods. It’s also a mistake to match or beat your competitor’s price to win the business, only to fail your dream client because you couldn’t afford to serve them.
When we sell, we help our clients understand the investment necessary to produce the results they need. This isn’t easy to do. And it is made more difficult when your prospective customer has unrealistic expectations and when your competitors are willing to sell a dream that won’t come true. But selling the value you create and the right investment is what professional salespeople, trusted advisors, or what I call Level 4 Value Creators do. It’s what differentiates and defines us.