How to Start Selling on Value Instead of Price

Author: Caron Beesley | March 25, 2014

Is your small business frequently undercut by deeply discounted pricing from your competitors? If you’re involved in highly competitive service industries such as general contracting, cleaning businesses, etc. where budget-conscious homeowners are involved – you’re likely facing this challenge on a daily basis.

So how do you respond when your business is forced to compete on price? Well, you might be surprised to learn that your best strategy has nothing to do with pricing.

After all, playing the price card can have a detrimental business in the long term. Not only are you slashing your revenues and margins, but you also risk attracting customers who only care about price. You’ll also undermine all the good work you’ve done to build your business, your brand, and your reputation.

Instead, consider these tips for bringing value back into your selling proposition and differentiating your business on more than price alone:

1. What Differentiates Your Small Business?
Not all businesses are created equal. Every window cleaner, landscaping, or pest control business does things a little differently to the next man. Think about what differentiates your business. Is it your experience or skill-set? Is it the training that you put your employees through? What about the quality of the materials you use? How do your differentiators align with the needs of your customers – i.e. how do they address their pain points?

2. What is Your Competition Up To?
In order to define how your business is different it’s vital that you understand what the competition is up to and why customers are using their services, or not. Check out the comments on their social media networks – what are fans saying about them? Don’t forget to check out reviews on Google and Yelp. Another useful resource for opinion is local online forums – oftentimes home owners associations have their own message boards where folks seek out contractor recommendations or post reviews. Nationwide forum sites like City Data are also useful.

3. Craft Your Message
Now you need to explain to your target market why and how your business is different. This is where your marketing message comes into play – also known as your “messaging platform” – this includes your mission statement, positioning statement, elevator pitch, taglines and slogans.

Be careful as you craft your message, although you want to tell people about your business (who you are, your products, skills, etc.) more focus should be given to explaining how you address your client’s problems. No one wants to hear the ins and outs of the expensive equipment that you use, they want to know how it will help them.

Your messaging platform is the cornerstone of how you present your business to the outside world so you might want to hire a marketing pro or writer to help you piece it together. Once you’ve nailed it, use it consistently across your organization so that everyone is singing off the same hymn sheet.

4. Use Proof Points to Evidence Your Claims
A great way to back up any statements you make about your business is to use proof points, this is the evidence that proves you’re as good as your word. These include customer references, testimonials, industry reviews, before and after images, customer quotes and so on.  Proof points can be added a variety of marketing materials including your brochure, website copy, email signatures, and more. When you use proof points make sure you tie them back to the key message that the proof point is supporting, this could be a customer’s challenge, how you approach to a job, or, of course, the results achieved.

5. Present Your Work Professionally
Use a few key presentation materials – your website, company brochure, testimonials, etc. – to show your work and tell your story.  Be sure to include key points explaining what qualifies you for this job, backed by your proof points and great references from customers. If your work can be emphasized visually, use sites like Pinterest, Google+, and Facebook to showcase your projects.

6. Show that You’re a Business Pro
One key way to differentiate yourself from lower-priced competitors is to clearly demonstrate that you know how to run a business. This is especially true if your clients are required to trust you with their home. Explain your business process and take measures to reassure your client during the bidding phase. For example, who will be doing the work? What is your proposed schedule? Show customers what they are paying for. Document each stage of the process with a formal quote, scope of work, project schedule, etc.

The Bottom Line
There will always be some clients who you’ll lose on pricing alone. But by showing each prospect the end-to-end value that you bring to the project will go a long way towards justifying your pricing and creating a more informed basis for their investment.

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