Stay Cool Under Competitive Price Pressure

Vince DiCecco is a dynamic and sought-after seminar speaker and author, with particular interest in business management/development and marketing subjects. With over 20 years experience in sales, marketing and training, he is presently an independent consultant to businesses looking to sharpen their competitive edge. Vince addresses a wide range of topics focused on nurturing customer loyalty while improving profitability. He may be reached via email at vince@ypbt.com.

First of all, there is absolutely nothing you can do to make price pressure go away. There will always be some competitor out there that will be 10 to 20 percent below your prices. Besides, it costs a customer nothing to attempt to get you to lower your price. What you can do, however, is learn how to handle the “I can get the same stuff down the block cheaper” and “Is this the best you can do?” claims more professionally, comfortably and confidently.

Start by describing demographically your ideal customer(s). If you are at a loss as to what I mean, create a spreadsheet with the list of your top 20 percent of customers and populate the matrix with facts about the companies and their decision-makers. Include things like size and sales of the company, number of years in business, number of employees and shifts, a diagnosis of the fiscal health, and predictable future for the company. When describing the decision-makers, note their age, gender, strongest business and personal needs, lifestyle, interests, quirks, and hot buttons. If you study what your best clients look like, sound like, act like, etc., you will undoubtedly detect a pattern.

Next, establish what unique value proposition (UVP) your business makes to them that keeps them coming back to you. Chances are your top 20 percent of customers buy from you despite your higher prices. Overwhelmingly, people buy from people they like, trust and with whom it is convenient to do business. But you need to determine what specifically they like and trust. Is it the quality of the goods and services? Is it your guaranteed on-time delivery? Is it the particular way you treat people both before and after the purchase (pre-purchase salesmanship and post-purchase support services are not one in the same)? Or, is it the one-of-a-kind, innovative design of your products?

Once you determine your UVP, use your prices as a reason they should buy from you, because for that higher price, the customer receives greater value and need satisfaction. Have them talk to your best customers. They will sing your praises and deflate your prospects’ efforts to get you to lower your price.

—Vince DiCecco, Your Personal Business Trainer