B2B Monday Myth: The Lowest Price Always Wins
by MGB2B
The Myth: The Lowest Price Always Wins
The Truth: Business Wins Based on Price Alone Might Devalue Your Brand Over Time
When you give a prospect a proposal, it’s easy to try to win using price. And in many cases, that may just work. But if price is the only thing that differentiates your brand, that’s a problem. Let’s take a closer look at what’s more important than pricing, and how you can deal with those customers who are only looking for a bargain.
The Biggest Problem with Competing on Price
Yes, prospects love low prices. And if you are able to compete on price without sacrificing the quality of your product or service, that’s great. But guess what? Your competitors can drop their prices at any time, too. Then what do you have? Are you the highest quality brand? Do you have the best service? What differentiates you from your competitors besides price? If the answer is “nothing,” it’s time to have another look at your brand’s positioning statement. The best part? Defining who you are as a brand will help you beyond just pricing. It will inform your marketing campaigns and drive everyone in your organization toward the same goals.
Offer Tiered Pricing
Sometimes the best B2B pricing strategy is a tiered one. Potential buyers like to feel empowered, and giving them a limited menu of options is a great way to do that. It also doesn’t detract from the value of your products or services. It says, “this is what we are worth at these different levels.” The buyer can then choose which level is right for their budget. And you don’t have to devalue the brand that you’ve worked so hard to build.
It’s Okay to Lose Some Customers (Really, It’s Okay)
There are prospects out there who genuinely appreciate what you have to offer them at the prices you request. And there are those that will suck your company dry. They are not interested in the quality. Or the service. Or the cost savings over time. They don’t appreciate those things. They will try to get you to bring your price down as low as you’ll possibly go. And then, when you give in, it doesn’t stop. They’ve seen you cave, and when the next project arises, they’ll expect you to cave again. These are not people you want to do business with if you can avoid it. Of course, when times are tight, you sometimes have to make sacrifices. But this should be the exception and not the rule.
When it comes to B2B pricing strategy, the stakes are high. It’s not just about winning another customer by lowering prices. It’s about what you have the potential to lose by doing so – the value and the integrity of your brand.
Tags: B2B pricing strategy, brand differentiation, customers who haggle, tiered pricing