On the side as a business owner, bidding on a project with the focus on price ‘just to get in’ and as an employee, being part of a price war, where no one wins. Competing on price is easy.
Competing On Price versus Pricing Strategy
Yes, there is a pricing strategy where you go in low but this a short-term strategy. It is designed and supported with other marketing elements, like loyalty programs, product bundling, brand building program and limited features.
The low-price entry strategy needs a marketing mix with short-term goals for it to be successfully implemented.
You now see these software companies who offer a free product or service option. It blends two strategies, pricing and penetration. The objective is to get as many people as possible using their free product with the assumption that a percentage of these free users will eventually turn to pay customers. These strategies include heavy investment in demand generation tactics, quick follow-up by email once you download a free report and an aggressive social media and email marketing programs.
Just give the companies some time, and you will see them adding telemarketing. (Folks, everything goes back to hard-core sales.)
Today, coaches, bloggers and nutritional consultants take this strategy in a more simplified form and call it, list-building program.
B2B Industries & Strategy
But, let’s return to the traditional B2B industry, the manufacturing, aircraft maintenance, printing and support services industries. If you find yourself consistently reviewing the competition, needing to know their pricing and always, near the end of the negotiation process cut your price, this is a signal that you need to improve your product offering. In doing so, you can develop a more precise brand position.
If you find yourself with the type of clients who struggle to pay or spend only pennies, this can suggest that you need to invest in solid salespeople who will go out and get you the right customer. These types of clients waste your time.
You may be surprised about what a great salesperson can do for your company. Not only do they have first-hand information about why your key target customer doesn’t buy from you, but they will also help you develop the right products and services to win them over. That’s because a great salesperson wants to win!
What about the classic, ‘me-too’ company. There are many of you, and this is where we come in and define your brand position and pound out that message until doubt turns to perception turns to truth.
As I said, I’ve been there.
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