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Did you ever notice when you stay at a nicer
hotel that the toilet paper corners are usually tucked down to form a “V”? Did
you ever ask yourself “Why?”
Or did you ever wonder why millions of people
choose the American Express credit card when there are so many other credit cards
available to them? Cards that require no annual fee – and offer better credit
terms.
Why are so many Mercedes sold every year when a Ford will get you
where you want to go?
In a world where price represents the majority vote
on purchasing decisions the above riddles wouldn’t exist. Hotels would all be
the same, as would credit cards and cars. The lowest cost provider would always
win
Luckily, for all of us we do NOT live in such a world. We get to chose
what we want and how much we are willing to pay. Sales and marketing professionals
know that while price is important in every buying decision, it is not the only
factor. They know that the real power lies in the perceived VALUE of the product
or service by the buyer.
I wish you could have been
there when my good friend, Joel Davis, PhD and Professor at the School of Communications
at San Diego State University, addressed a group of business professionals to
drive home this point of value. He asked two “plants” in the front row to give
him their watches (inexpensive ones for the demonstration). He then placed each
one in a deflated balloon. He knotted one “as is” and knotted the second after
blowing it up - with the watch visible inside. From under the table Joel raised
his arm, brandishing a common household
hammer. With one smooth motion he
smashed the watch in the flat balloon in about two seconds. He then repeated the
same attack on the inflated balloon. But try as he might, the watch remained intact!
Obviously, the watch in the second balloon remained
whole because the air acted as a cushion. Metaphorically speaking, the air represents
value – the value each business must define for itself and the target audiences
it wishes to serve. If a company has not defined this value internally, validated
it externally, and reinforced it continually to its customer base it is much
more likely to get hammered on pricing – especially in this economy.
If you’re thinking this example validates your suspicions
that marketing and sales are just a lot of hot air, you couldn’t be further from the truth.
You
see, value, by definition, is “a fair return in goods and services for money exchanged.”
This implies that the “value” must provide a benefit that is important to
the buyer. Value includes all those reasons that buyers buy from you and those
reasons have to be relevant to the buyers’ needs. Hot air just doesn’t cut it.
In
the business-to-business world “important” generally means that the product will
either increase sales or decrease costs.
Oftentimes it translates into things
like quicker turnaround on orders, expertise, better payment terms, advertising
support, relationships, the ability to access niche items for customers, shipping
complete orders, uniqueness of the product, perceived or real superior performance,
brand equity, and on and on.
What value statements
trip off the tongues of your
sales force when a buyer pressures them for a
price
cut? Are all your employees fluent in them?
Are you folding down
those corners on the everpresent roll of toilet paper to demonstrate you care about the
value you are delivering? You can do this by proactively communicating those value
messages to
our current and potential buyers on a consistent basis. In that
way you have armed them against a competitor’s lower price offer. They’ll know
why they’re better off with you.
If you’re getting hammered on pricing give
me a call. I’ll help you define your value and design and implement a plan to
communicate that value to your customers and prospects.
Remember, Mosaic creates customers and increases sales for business-to-business companies through specific project work, on-going retainer assignments or marketing coaching sessions.
Until
next time.....
Rosemary
Walter
847-483-5018
Rose1Walter@MosaicMM.com

Quote
of the Month
"Nowadays people know the price of everything
and the value of nothing."
— Oscar Wilde
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