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Plus the Value You Add

Anthony Iannarino
Post by Anthony Iannarino
September 23, 2013

Despite how common it is, of the toughest challenges a sales person (or sales organization) can face is having a product or service with the same cost basis as their competitor’s. You each pay the same price for the component parts that make up what you sell, whatever that may be. The difficulty is caused by the fact that your prospective clients know that your cost basis is the same, resulting in a lot of pressure on your pricing.

Costs + The Value You Add

But the difference between your price and your competitor’s price is only one thing: the difference in the value that you add. Your price is X plus the value that you add. Your competitor’s prices is X plus the value that they add.

Your job as a sales person (or as a sales organization) is to focus on creating the value that makes you worth paying more to obtain.

This doesn’t mean that it’s ever easy to compete in this situation. But it does mean that some of your competitors will choose to subtract value in order to capture market share. Instead of trying to be best-in-class, world-class, or exceptional in any way, these sales organizations will subtract value in an attempt to be just good enough. They treat their offering as if it’s a commodity, and so some segment of your market (probably too larges a segment) will choose to believe that you sell as a commodity.

The Upside

There is an upside to this problem. The subtraction of value creates dissatisfaction.

If your prospective clients suggests that price is most important, you can test that theory by asking them if they’re willing to give up service, support, the business results they really need, or any of the things that make you a strategic partner. Invariably, mature business people will answer that all those other factors are important to them, and probably more important than price.

But you will run into the rare few who will say the price is the most important factor of all. They suffer under the persistent delusion that they can have all of the things that come along with the higher price by still choosing the lowest priced provider. These dream never come true, and the people and companies by this way suffer from an equally persistent dissatisfaction. And when the pain is great enough, they mature and make the necessary investments.

Your price is X plus the value you create. It has nothing to do with your competitor’s price. The case that you need to make is that you can and will create the additional value you are trying to capture.

Tags:
Sales 2013
Post by Anthony Iannarino on September 23, 2013

Written and edited by human brains and human hands.

Anthony Iannarino

Anthony Iannarino is an American writer. He has published daily at thesalesblog.com for more than 14 years, amassing over 5,300 articles and making this platform a destination for salespeople and sales leaders. Anthony is also the author of four best-selling books documenting modern sales methodologies and a fifth book for sales leaders seeking revenue growth. His latest book for an even wider audience is titled, The Negativity Fast: Proven Techniques to Increase Positivity, Reduce Fear, and Boost Success.

Anthony speaks to sales organizations worldwide, delivering cutting-edge sales strategies and tactics that work in this ever-evolving B2B landscape. He also provides workshops and seminars. You can reach Anthony at thesalesblog.com or email Beth@b2bsalescoach.com.

Connect with Anthony on LinkedIn, X or Youtube. You can email Anthony at iannarino@gmail.com

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