When You Can’t Compete on Price

General Sales
When You Can’t Compete on Price
By Tom Reilly
Oct 6, 2003, 16:27

Your competition sells
good stuff; you sell good stuff. Their service is acceptable; your
service is acceptable. Their prices are competitive; your prices
are competitive. In other words, the buyer looks at your package
and the competitor’s package and sees parity, along the product
dimension and company dimension. What’s a salesperson to do?

The same product, from the same company, from two
different salespeople is two different solutions altogether. Two
Fortune-500 type companies asked how much value their salespeople
bring to the table and discovered that 35-37% of the value customers
receive comes from the people with whom they do business. Do you
bring that much value to the table? If you left your company tomorrow
and went to work for a really good competitor, how much business
would you take with you? If your answer is “little”
or “none”, I would argue that you’re not bringing
much value to the customer.

When products are similar or the same, and the suppliers’
services rival each other, the only thing left to differentiate
a solution is the salesperson. How much are you worth to the customer?
A business owner told me that he wanted to be routinely 10% higher
than the competition. “If the buyer doesn’t feel I’m
at least 10% better than the competition, I need to know about it,”
he said.

If you couldn’t sell at a cheaper price, how
would you communicate your value to the customer? If you couldn’t
argue that your service was any better than the competition, how
would you sell? If you couldn’t rely on product differentiation,
what would you use as an advantage? You would have only yourself
left to sell. You must be able to answer this question for the customer,
“Why should the buyer want to do business with you as a salesperson?”
You are the “product” over which you have the most control.
You may not be able to do anything about your product’s quality
or your company’s service level, but you can do something
about your performance. One study found that the salesperson’s
competence is the number one factor accounting for overall customer
satisfaction. All other things being equal, would the customer pay
to do business with you, as a salesperson? You can increase your
value to the customer by doing the following.

Study. Become a serious student
of our profession. Increase the value of your knowledge. Study the
market, your company, the customer, your products, and our profession.
Become an expert. Learn so much about your craft that the customer
can’t afford not to do business with you. Become the benchmark
by which all other salespeople are judged.

Follow up. The number one complaint
buyers have about salespeople is a lack of follow-up. Guarantee
your follow-up. Advise buyers that this is part of your value added.
Assure them that you will be there after the sale to guarantee their
complete satisfaction with your solution. Promise them accessibility
before, during, and after the sale. Promise a lot, but always deliver
more than what you promise.

Seek to add value, not cost. Diligently
look for ways to add value with your performance. The customer must
perceive you as a profit center, not a cost center. Help the customer
achieve greater efficiency and higher productivity. Help the buyer
gain maximum performance from your solution. Work as hard to keep
the business as you did to get the business. Look for ways to re-create
value at every turn.

So, if you couldn’t compete on your price,
your product, or your company’s service, how would you compete?
Would your customers be willing to pay more to do business with
you, the salesperson? You may be the most significant competitive
advantage that your company offers.

About Tom Reilly Training:

Sales Motivational Services began in 1981 as a sales training company.
Originally, our focus was a five-day public sales course, but we
quickly adapted to customer requests for customized, in-house sales
training and sales management training. Today, we have expanded
our training programs to include training employees at all levels.
In 2001 the company name was changed to Tom
Reilly Training.

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