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Value or Low Price?

M Dana Baldwin, Senior Consultant

Strategic Planning Expert

Strategic Planning Expert

Do you know what your customers really value?  What are they willing to pay for that you can bring to the market place?  What is important to them that you can provide?  Does this give you an advantage in the environment in which you work?  Can you use this advantage to improve your competitive position?

When you learn what your customers value, then you can build on these values to gain an edge in the market place.  While price is almost always a consideration, what the customer really is looking for is a solution to a problem.  When all other factors are essentially equal, then price will be a determining factor.   So, if you have you listened well enough to determine what the problem is, deeply enough to realistically provide an optimal solution to that problem, then you actually can compete effectively for the customer’s business, even against a lower priced competitor.

Listening to your customer is the key in this type of situation.  You should be asking structured questions that probe your potential customer’s needs and wants.  These questions should generally start by seeking what problem areas the customer is experiencing in the range in which you can supply solutions, and what the criteria should be for helping to resolve the issue.  Only when you have enough information to fully and deeply understand the customer’s situation, needs and preferences, should a proposed solution be explored.

What if your competitor is lower priced?  If the main factor in your competitor’s position is price, it could be likely that your lower priced competitor is not as knowledgeable about your customer’s needs as you are.  The reason for this is that often, lower priced competitors concentrate on lowering costs of the product or service, and not on responding to customer’s higher level needs and preferences.  This should give you a real competitive advantage, when you have done your homework.  By asking the right questions, and finding out what is really wanted as a solution to a problem, you should be able to prove that your solution is the superior value for your customer.

That homework involves asking good, focused questions which are designed to bring out what your customer values, what they are willing to pay for and sets the stage for your ability to provide a clearly superior value proposition to your customer.  By providing this well focused solution, you should be able to fend off lower priced competitors, having the highest value solution to your customer’s problem.

If your strategic planning doesn’t help you focus on solving your customer’s problems, let us help you do a better job of developing strategies to provide wanted solutions to those problems.  Contact me at baldwin@cssp.com, or call me at 616-575-3193.

For more information on this subject, please read these two articles: Mining Your Unexploited Value – Part I, and Mining Your Unexploited Value – Part II, both by Tom Ambler, Senior Consultant, CSSP, Inc.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com

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