You don't have to compete on price!
There are probably 30 frequently voiced frustrations that I deal with all the time.
Probably the biggest one is from people who are beleaguered and they're just frustrated, because they're relegated to being a commodity by the market and they're forced to compete on price alone. At least that's what they think they have to do.
It probably hasn't always been quite as brutal as it is now, but let me make a clarifying statement. One of the most saddening observations I make of business people in general today is their unwillingness to recognize that change is immutable. Change is going to occur whether you like it or not. Wishing and hoping that it would be like it was in 1996 or 1982 or 1970 brings you no advantage.
Defiantly refusing to meld, or comply, or acknowledge the dynamic changes in the competition and all those other factors in the marketplace, and acting ostrich-like, and burying your head figuratively, and continuing to use the old strategy that doesn't work and working it harder and thinking it's going to work better when it didn't work the first time is delusionary.
My whole recommendation is to realize that change is either your greatest ally or your most mortal enemy. And it has nothing to do with change itself It has everything to do with you and the way you embrace it, the way you capitalize on the action of someone trying to make you into a commodity, which would be to look at the situation entirely differently.
I would look at it and say, "Look, everyone else is being forced to be a commodity. They've resigned themselves to the fact that those are the rules they have to play by.
"You don't have to. You can be a proprietary. You can refuse to just sell 'blank.' You can make your proposition different. You can add other products or services to the transaction. You can make what you do different. You can make the product not be the real value, but the advice or the assistance or the technical expertise that you bring that would cost them a fortune. But it's free if they buy the product from you.
So all of a sudden you're not competing on the same commodity basis as anybody else. And all of a sudden you've got the playing field totally to yourself.
I have a friend who is in the fulfillment business. He works with people who sell all kinds of products by mail, and they ship them all over the country.
The fulfillment business is a commodity business where you go to them and everybody is $2 or $3 or whatever. But they're all pretty much the same. They're cheap-price-based. They're not emotionally wedded to the client. They're basically a bunch of impersonal, compassionless, large or small facilities.
My friend approaches it differently. His approach is if you work with him, here's what you get. You get a facility that worries about your product as if it were its own. You get a facility of experts who are paid millions of dollars for the team who collaborates with you and helps you devise ways to make your product sell even better. You get a facility where they get the orders out, guaranteed, every day because they know that if it takes longer, you get hit with a higher degree of refunds or dissatisfaction, and that lowers your profit and lowers your ability to pay them. You get a facility where they are constantly working to find ways to improve the way you do what you do so they can lower your cost. And you get a whole different attitude.
That positioning makes the $3 not even be relevant, because they go through an analysis of what it costs you if you use the wrong facility and they take three weeks to ship (because bulk rate can take three weeks). A lot of people will only ship once a week. When you do that, there are studies that show you get four times the refund rate. It doesn't matter if somebody is 25 cents lower if 25% of the orders come back. They position totally different.
I once had a dental supply company as a client. They sold all kinds of supplies that dentists use in their practice; drill bits, and floss, and rubber gloves, and stuff that numbs your gums, and mouthwashes, and all the other kinds of products. Plus or minus a few percentages, everyone's prices were the same.
I got them to take a different stance. I said, "Look, everyone's dealing on a single-issue basis when they sell. You're dealing with products and supplies to dentists. The truth of the matter is the dentist has a much bigger problem than who to buy his supplies from. He'd much rather buy more supplies if he had more business, more clients, more patients. He'd much rather keep more of the money that he had, meaning operate his business more effectively or pay fewer taxes. He'd much rather not have to worry about managing a staff that had a high turnover, but more loyalty, more perseverance, more enduring customers.
"If you can help that dentist on those issues and produce a profound and a measurable positive impact, they aren't going to mind buying from you. They'd much prefer buying from you, even if it's a little bit more, because you bring so much more value and advantage to their lives."
So I set up an operation where if you bought a minimum (and I can't remember, I think it was $500) of supplies a month from this business, you got free access to training tapes and programs and even experts we had on retainer in selling, in marketing, in management, in tax and investment planning and all kinds of things which brought far more advantage to you than the 2% or 3% difference in savings you might get buying from one of the others. That was free.
So I changed them from a commodity selling the same product at or around the same price, to a company who was committed to growing, preserving, and expanding your success. And that was free if you bought from them. Does that make sense?
I once helped a company that thought they had the ultimate commodity and were destined to forever be in the price bidding game. Where basically you've got to bid for something and it's blind. They basically say, "OK, bid on this process."
I got that company to refuse to do that. In other words, I said, "Let's look at the whole thing - what goes before it, what goes after the process you're bidding on, and what goes with it. Find out what those are and if there's enough profit in your bid, add that other step free as a bonus for the same price. Just because they say they want you to bid on binding this book, if you say, 'I'm going to bid on binding it, plus I'm going to bid on throwing in the covers, too, and it's the same price,' all of a sudden you're proprietary.
Many people are frustrated because they can't get enough new customers or leads. But the frustration is really based on the fact that they don't understand that they're self-serving. They're saying, "I don't get enough people to come to me" instead of saying, "How can I bring more value to others?"
When you change the focus, people will flock to you if you're holding something of value and you can communicate that. Most people don't have anything of value. People just want their reward. That's why no one comes to them.
Posted January 31, 2005
More Business-Building Articles By Jay Abraham:« 34 Ways To Use Direct Mail To Build Your Business
