Many of my clients are premium service providers. Their expertise is unrivalled and the services they provide are truly top of their field. However, sometimes they find themselves trapped in a race of price.
How do you win the customer when your competition offers a price that is unacceptably low for the service you offer?
Here are two strategies that I give to our clients so that they can retain their premium price tag and exceptional standards.
If you would like to hear more about this please feel free to get in touch below.
Strategy 1: Prioritise being the best athlete, not the most attractive one
One of my clients used a very clever phrase on one of our group consulting calls: “You can have fast, brilliant, cheap. Choose 2.”
That quite succinctly summarises this first strategy: you need to get them to see that the value you are offering is worth compromising on the “cheap” part, by showing you are actually giving the best results.
The fastest runners haven’t by cutting costs. They’ve trained hard, and they’ve invested in their equipment, their consulting, and their personal health. They recognise that the value of buying the best shoes is worth the monetary cost. They recognise that the value of training every day is worth the cost of spending that time becoming stronger instead of watching TV or playing a video game. They recognise that the value of eating healthy is worth the cost of not satisfying the immediate gratification that less-than-healthy food would offer.
Here’s a framework that may give some additional clarity:
Value = Benefits – Costs
The benefits here are all the services you are providing to your clients. The issues that you are pre-empting for them and solving for them.
The costs here are what they have to give you or give up to receive those benefits. This can come in the form of money but could also be other ways – time, effort, headspace etc.
When you can demonstrate clearly that you understand your customers emotionally, what they are suffering with, and that your solution will resolve it, it becomes clear to them why you are better than any cheaper competition.
A clear understanding of the costs from their point of view demonstrates an understanding of the customer’s position, and then they are more willing to accept that the value of what you are offering is worth that cost.
What’s the bottom line? Demonstrate that the benefits you offer are worth the cost. Focus on value, not price.
Strategy 2: Take yourself out of the running
The 500m relay runners won’t be compared to a 100m sprinter and neither of them will be compared to a marathon runner.
So, when you think you are locked in a battle of price with your competition, then maybe it’s not about proving you are better than them, but that you are something else entirely.
Change the frame of reference – show you are not actually running the same race as the competition they are comparing you to.
Your prospect’s previous service provider – and your competition – have been working within a certain framework. They have set up certain ‘service level agreements’ (SLAs).
If you want to distinguish yourself from them, then detail out the benefits of your service and lay out an SLA that is something entirely above and beyond anything your competition offers.
This then takes your prospect away from comparing you to the competition and instead allows you to have an independent conversation with your prospect.
The decision from the customer point of view is then no longer centered on the price, but instead on what you are actually offering them. This makes it easier, really, to engage in the first strategy above – because they are focused on the “benefits”, not the “costs” part of the equation already.
What’s the bottom line? Show how different your service is so that comparing you to the ‘competition’ looks like comparing apples and oranges.
Are you ready now to strap on your running shoes and get ahead of your competition? Do you have any other ideas on how to stand out against the cheaper competition? Let us know in the comments below.
If you would like to discuss any of the points covered here, please feel free to request a free call below.