Selling blindly on price has always been the lowest form of marketing intelligence (it also means you've run out of ideas). It only sets a death spiraling precedent because once you introduce your value based on price customers will evaluate you on this and then ask you to go lower next time. You're selling a price point, not your own unique version of value.
If you don't have the answer to the question of how you quantifiably add value to your customers or clients then you're on borrowed time. value in some shape or form because the disposable money that was around before isn't around now. Whether it's sales, staff development, team morale, leads, introductions, talent management, competitor anticipation or thought leadership you need to be delivering something of demonstrable value.
If you can't prove the value of your client's investment then that's a risk for you and for them. Anecdotal, subjective or big-name reputations aren't going to win people over these days. And the cowboys before you who promised the world and then delivered nothing have made your hard job even harder. And making things pretty isn't what it's all about either (take note fluffy design agencies).
Clients want and need more (and often and unfairly more for less). They want evidence-based claims, proven facts, testimonials and case studies with the results to back them up that reduce the risk of investment, appointment and partnership. Without them they are going to struggle to convince themselves, or their management, why they should be making this investment.
Value doesn't have to come in purely monetary terms. Value take can many forms from the soft to the hard:
- Brand Awareness (soft)
- Brand Consideration (soft)
- Media coverage - meaning you don't have to pay for expensive and ineffective advertising (medium)
- Introductions - to strategic partnerships or alliances that can help grow leads, sales or share faster (medium)
- Increasing referrals so you don't have to market, your customers do it for you (medium)
- Talent Management/Professional Development - improving productivity and throughput of employees (medium)
- Brand Loyalty - increasing customer retention or reducing customer churn (medium)
- Increasing profitability or margin - sales are one thing, margin or GP is quite another (hard)
- Return on investment - spend $X to get $Y (hard)
Before you next decide to do another sale (and join all the other retailers along Emerson Street) ask yourself what am I selling? The answer is you're selling a price point - not a unique value. And that means de-valuing future sales and future margins. Sales not only eat into margin, they set a precedent and an expectation in the customer's mind (anyone not shop at Briscoes or Rebel Sports when they DON'T have a sale on?). Kirkcaldies and Harrods on the other hand have the sales balance right because when they do their annual sale it's an actual and real event. It is a genuine sale.
Once you've introduced yourself on price, customers will always evaluate you on price because that's all they know. You've set the conversation along with their evaluation criteria. It then limits your ability to sell to them at a higher value. And if you have too many sales then you're just encouraging customers to buy from you when the sale is on (Kathmandu is a classic example). If sales are the only lever you can pull, perhaps you need to think harder.
The best and most important question you could ever ask is "what does your client value?" Have you asked them or have you just assumed you know? Or maybe you think you could get away without asking it because you were fearful of the answer and your ability to respond. Once you have defined the value they require, define your own and go for value-based pricing vs. price-based pricing.
If you can deliver or facilitate on the value that your client requires then you are well and truly in business.
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