How to Win the B2B Price War

In this world of high speed communication and 140 character limits, we seem to have become infatuated with short forms and acronyms.  It isn’t too hard to draw the comparison between our communications today and the game of horseshoes. In other words, we use vocabulary with less precision than a given word actually conveys, but that’s okay because getting close seems to be good enough.

 

 

 

 

 

 

 

 

Or is it?

 

 

What has this got to do with pricing you might ask? We invariably talk about the cost or price of a product or service that we are either buying or selling. However, when we are ‘on our game’, we’ll use the word investment or introduce the idea of value. Unfortunately, old habits die hard and it is very easy to forget to reinforce the result that one can achieve from an investment that has been made.

Now, we might ask ourselves, “what’s the big deal?” In my mind, the big deal results when we think about the behaviour and attitude that are generally attached to the words cost and investment.

Costs are generally meant to be controlled. Costs tend to be something that we either want to avoid, reduce or, at a minimum, hold constant.  The word cost tends to cause us to think in terms of such adjectives as “expensive”. If ‘how much does this cost‘ is an early question asked by the prospect, then chances are we have not established our value proposition with this person.  It will also be difficult for us to know how to clearly articulate our value proposition if we have not identified the emotion that underlies a prospect’s initial interest in our product or service.  Without this knowledge, we are simply ‘pulling on levers’ without knowing if the levers are connected to anything of meaning to the prospect.

So, … we’ll be in a much better position if we can not only understand the prospect’s stated need, but also the underlying emotional reason for this need. With this understanding firmly in hand, we can speak much more confidently about the return that is possible with the investment being considered. We’ll understand how our product or service can address the emotional need of the prospect. We’ll be able to speak about the value to be derived from the investment being contemplated.

If we’ve made the emotional connection with our prospect, then the level of trust that the prospect ascribes to us will be much higher.  A trusting relationship supported by our understanding of the emotion driving the prospect will greatly diminish any focus on price and solidly centre the conversation on value. Price may not be part of the discussion.

In the parlance of horsehoes, a ‘ringer’ could be just the next ‘pitch’ away.

Aim Higher. Be Different.

We are now into week two of the 2014 Olympics in Sochi, Russia.

If you are Canadian, you are likely one of many holding our collective breath to see how we do in such events as ice hockey, curling and skating.  Naturally, the team or individual that wins a given event will have to be the best on the day of that particular competition.

In my mind, competition is not only about being better, but also about being different.

Those athletes who are measured both quantitatively and qualitatively, such as figure skaters, are judged better when they are different.  The chosen degree of difficulty, the music selected and the energy brought to the routine all contribute to the skaters being different.  Like all Olympians, the skaters’ goal is to be stronger, faster, more agile and more focused.  They push themselves to be more daring; to use every reserve of energy.  They push themselves to be better; to be DIFFERENT.

And they train relentlessly.

What are we ‘business athletes’ doing to be DIFFERENT from our competitors?  Do we spend time thinking about and then implementing the steps that we might take to wow our customers?  Are we focusing our efforts on providing a customer experience that far exceeds ‘meeting expectations’?

Like the Olympians, our business efforts are being judged.  Our performance standard is set by our competitors.  But, the judge in our case is every single customer and every single prospect.

If we are not being DIFFERENT in our businesses, how do we stand apart from our competitors?  How do we get chosen?

Fundamentally, it is a choice that we make.

What choice are you making?

A Slippery Slope

I recently had the pleasure of listening to Brian Tracy conduct a teleconference call on the subject of leadership. During his presentation, he suggested that there are two types of entrepreneurs: those that are constantly upgrading their knowledge and skills and striving to move forward and those that are coasting.  As he finished this statement, he reminded listeners that there is only one direction in which you coast.  It occurred to me that not only do you coast downhill but you would also be going backwards!

The above reminds me of the following quote from John Kenneth Galbraith:

“People are the common denominator for progress.  No progress is possible with unimproved people”

In my past corporate life, the funds needed to upgrade our knowledge and skills frequently seemed to be a discretionary line item in our budget.  I don’t recall that much energy went into discussing the skills and knowledge that our organization would need to possess in the future.  Perhaps there was a product bias that caused us to believe that our product portfolio was strong and that it was the primary source of our differentiation.  I don’t know.

With the benefit of hindsight, I would argue that a strong link must be made between training and the business objective of achieving sustainable differentiation between you and your competition.  The source of differentiation is people based and if you subscribe to Galbraith’s statement about progress, then you need to think carefully about the training required in your organization.

After all, if coasting downhill isn’t frightening enough, try doing it backwards!

What Will You Do Differently Next Year?

For those whose fiscal year follows the calendar, a new year beckons.

Will you be entering the new business cycle with a “steady as she goes” attitude or do you recognize that more of the same might, in fact, be a risky approach?  It could well be that you are coming to the close of a strong year and your focus might easily be “how do we maintain our momentum?”  But, how strong has your year really been?  You can certainly compare your current results against the prior year and state unequivocally that the numbers are up (if in fact they are).  But a more relevant comparison would be how you are doing against your competitors.  Is it possible that your competitors are enjoying an even better year than you are and consequently, you are actually slipping behind?  Of course it’s possible, but how would you know if that has been happening?

When you get fully absorbed in running your business, it is very easy to remain in technician mode. You just keep “working in your business”.  If you are not careful, you can lose sight of what is going on around you.  You might think that all is well with your customer base, but how do you actually know that is the case? Could it be that your presumptions are based upon the old adage that “no news is good news”?

In the absence of certainty, why don’t you build a scenario in which you assume that the competition is out flanking you.  Rather that adopting an attitude of laissez faire, why don’t you assume that your current strategy could stand some revisiting?  Perhaps you might challenge yourself by making your strategy more “ruggedized”.

The author Seth Godin suggests that playing it safe is the riskier approach to running your business.  Now, please recognize that I’m not suggesting that strengthening your strategy means a wholesale change to your current business model.  But, I am suggesting that the status quo is a dangerous place to be.

Why don’t you decide that 2014 will be the year that you determine what actions can be taken to be different in a meaningful way to your customer base?

Is That So?

I was recently listening to a CBC radio program in which a neurologist (David Perlmutter) was talking about the harmful effect of carbohydrates and sugars on the brain.  As I understood the discussion, the body’s defensive mechanism against carbs and gluten is inflammation.  It was this inflammation that had the neurologist concerned.  He attributed the onset in later life of brain degenerative issues such as Alzheimer’s and Parkinson’s disease to the inflammatory effects of carbohydrates and gluten.  He also indicated that excessive carb intake contributes to ADHD, heart disease, diabetes, depression and obesity.  His bottom line was that our dietary choices shall have a huge impact on our future quality of life.

Interestingly, a second scientist (Carol Greenwood) spoke to the benefits of carbohydrates and whole grains.  Her general take on dietary choice was one of balance.

Hmm.  What to believe?

I have started to count my daily carbohydrate intake and intentionally kept it under the suggested daily intake of about 260 grams.  Coincidentally or not, I have shed about 3.5 lb over the past five days, in combination with four exercise outings.

Part of my purpose in writing this blog is to point out a related (at least it is in my mind) but different subject and that is the idea of life long learning.  My interest in learning new ideas about diet is equally applicable to my overall interest in life long learning.  As a business coach, I find that most business subjects/concepts/ideas have relevance outside the workplace.  But the important point for me is having an attitude towards life long learning.

For a long time I’ve felt that I like the idea of being smarter tomorrow than I am today.  For this to happen, I have to be open to the possibility of learning.

I would encourage everyone to embrace the benefits that come with learning.

BIZBUZZ – S. Godin, Purple Cow: Transform Your Business by Being Remarkable

This is episode 1 of my version of BIZBUZZ.  I stimulate conversations that challenge business owners to consider new possibilities and to act boldly.

This video highlights some of my selections of the most significant comments made by Seth Godin in his book Purple Cow: Transform Your Business by Being Remarkable.

Hi, I’m Gary Brown a FocalPoint business coach.

Welcome to BIZBUZZ.  This is my attempt to help you generate some buzz in your business.

I’ve chosen to comment on Seth Godin’s book entitled Purple Cow: Transform Your Business by Being Remarkable

I really enjoyed reading this book and I found a number of very thought provoking ideas and suggestions.

I’d like to comment on three of them.

The first is the overall emphasis on differentiation.  Godin says this OUT LOUD when he claims that the opposite of remarkable is very good.  This bears repeating … the opposite of remarkable is very good!  If you think of a scale that has remarkable at one end and say, mediocre on the other end, how many of us would have placed our business on the wrong side of very good?

My second take-away is that it is safer to be risky than to play it safe.  In a crowded marketplace, Seth Godin suggests that playing it safe, or fitting in, frequently leads to failure.  Are we prepared to exchange safety for riskiness?

Finally, my third choice is the suggestion that your marketing message needs to be targeted towards the innovators and early adopters in the marketplace for your product or service.  Godin describes your message as an ‘ideavirus’ and your task is to find the early adopters who are most likely to ‘sneeze’ your message onwards.  Consequently, he strongly suggests that you avoid a marketing message that is aimed at the general marketplace.  It’s a waste of your resources.

That’s it for the Purple Cow and for me.

Let me know if this produces any insights for you.