Like most business owners I get approached by salespeople trying to sell their wares to me on a regular basis. Yes I know, ‘sell’ to me, in today’s sales-adverse world. Not offering me any obvious value for my attention. Not nurturing me gently along a buyer journey of well-timed and useful communications and offers. Instead, noisily pushing into my inbox, popping up in my LinkedIn messages, and trying to get through to me at the office, or on my mobile. Interrupting my day with mismatched offers for my needs, often trying to grab my attention with a cost proposition. Recruitment agents, data suppliers and martech companies – sorry, but many of you need to take note!
I must admit, if I’m in the mood, I enjoy putting the odd caller through their paces to see how well they know their product or service. I’m also intrigued to see how they respond to my questioning about the value they can offer to my business, regardless of any pricing incentives they lead with. You see, I’m fascinated by how b2b businesses articulate their value, especially at the sales coalface, when it’s so easy to slip into a price discussion at the first sign of disinterest.
Busting the b2b cost myth
There’s a big difference between selling on cost versus value in the business-to-business market. And I’m of the belief that companies which sell purely on cost comparison end up losing in the long game. It’s very difficult to build a profitable and sustainable business brand when your strategy is to continually undercut the competition. Plus, your margins will eventually get suffocated and your brand will become overshadowed by others holding their price position and focusing on value. Unless of course this is your core business model and you’re 100% transparent to your customers about what they can expect for your cost i.e. Ryanair.
A common misconception among many b2b companies when market conditions are aggressive is that most buyers only want the best price. But this is only true if you’re offering pretty much the same product and service choices as your competitors, with little differentiation and no tangible additional value. This is the exact point when price becomes the driving force to a customer in a buying situation or negotiation.
According to research carried out over 15 years by UK market research company B2B International:
“The average proportion of any market that prioritises price over all other issues is 20%. 80% of business-to-business buyers do not prioritise price. In other words, price-focused salespeople are leaving value on the table in 80% of cases! Even in highly undifferentiated markets such as utilities, fewer than half of buyers prioritise price. The myth of the price-focused market is perpetuated by simplistic b2b salespeople who only know how to sell – or only want to sell – on price.”
How your b2b brand can articulate value
Value is difficult to pin down, and this is one core challenge we focus on here at Upp B2B when working with our clients to build their brands. Value isn’t an easy word to articulate, or to differentiate, even when you really put your mind to it. Put simply, ‘value’ means all the things that can’t be quantified in your pricing. The things that delight a client and that separate you from the pack. It may be something as simple as an extended warranty or guarantee, or something more complex like bespoke integration of customer-supplier technology systems to drive joint improved efficiencies.
It’s also your ability as a business to provide something that’s not readily available in your market, or something in scarce supply. Something in your product or service offer that buyers won’t find everywhere, or ideally anywhere among your competitors. And it’s the job of your brand to stamp this in the mind of your customers, to help you to win business, command a premium, or to stand by your price position when the going gets tough.
The toughest job when selling value to customers is getting them to picture the full breadth and depth of everything your business can offer:
- All the areas in which you instinctively know you perform better than your competitors.
- The unique things that make your company a great or aspirational business partner.
- The technology you use to give your customers a competitive advantage.
- The training and support you offer to help customers get the most out of your product or service.
- The pockets of genuine and scarce expertise held within your team.
- How you’re making a difference to the wider world and how this fits with your business purpose and that of your customers.
This is where your brand comes in, providing the vehicle to bring all this together to build the value picture, in a focused and cohesive way. Perceptions of price and worth are carefully woven into this picture, as a result of rational and emotional brand associations that are created and reinforced at every brand touchpoint your customers experience.
If you are able to clearly articulate your value alongside your price in this journey, you will harness the power of one of the most important factors in the decision-making process of your customers. So, it’s worth investing time talking to your customers to understand what’s important to them and what they perceive to be ‘valuable’. Then, if you can focus your marketing to effectively communicate your value as a business throughout the buyer journey, your cost will have perspective and context when you hold tight in a negotiation.