Let's look at the automotive industry for an example of a price-driven marketing strategy. The gamut of most auto marketing for luxury and economy brands tends to be price. Automotive discount pricing commands the communication strategies across the omnichannel universe.
However, given the number of vehicle recalls, some of which could be deadly if not rectified opens the door to the conversation of price vs. value. For example, let's say that an auto driver purchases a vehicle based on a competitive price. Later, the driver realizes that the car has a history of problems that occur within the manufacture warranty timeframe. Since the car breaks down a lot, the driver realizes that he will lose time due to vehicle servicing. The car owner may not have factored this into consideration at the time of purchase.
The question to ask is if the discount outweighs the value of a higher-priced vehicle? If reliability is a factor, the value proposition of a pricing discount may be less than valuable. Alternatively, if reliability is not a primary factor, then the value of the car's price may be more formidable than other factors such as reliability, warranty, interior/exterior colors, and other features. This example demonstrates that pricing alone does not necessarily mean that the value proposition is equal to the pricing discounts.
Where is the Value?
When price-driven marketing is the competitive messaging by the majority of automotive dealer groups, there is a void in terms of value-driven statements. There are exceptions; for example, Subaru makes a case for durable and long-lasting vehicles, a hallmark of the company's marketing for decades. However, less is said about the technologies that make Subaru safer, more dependable, and economical to own.
Some automotive advertisements illustrate new creature comforts, night visibility technology, lane sensors, automatic braking capability, gas mileage estimates, and the like. However, most dealers market these features in the showroom as upgrades, and upgrades cost more. The real value of a vehicle is the total cost of ownership that is determined by the long-term viability of the car versus breakdowns and repairs.
It is a given that value propositions are part of the total cost of ownership versus the price equation. For example, one could purchase a house at a reasonable price. Over time, the value of the home will either increase or decrease based on several factors. If the neighborhood is one that is growing and the county keeps taxes reasonable, that is positive.
Conversely, the type and value of construction materials play a significant role in terms of price valuation. Another value-statement is the repairs and upkeep, whereby the house becomes a "money pit," and the owner continually has to spend money on repairs. Again, the selling price versus the total cost of ownership dictates the bottom line overall value of the purchase.
Sell the Value First
The selling of value first actually sets the pricing model. In the B2B world, the value should be the most important attribute that leads to the purchase. Such is the case in the commercial print world, where tens of thousands to millions of documents and print marketing materials are on the table. That said, print buyers have multiple options, but most are concerned with choosing the best deal, the most reliable vendor, capability, and scalability. If that's not enough, print buyers are also looking at vendor equipment and infrastructure, and most importantly, data life-cycle management.
Make Life Easier
For the automotive driver, the new homeowner, and the commercial print buyer, the common thread amongst these diverse examples is the prospect of purchasing an item that makes their life comfortable and easier to manage.
That said, in the case of the print buyer, the vendor selection decision impacts the buyer's job, so the buyer will view a vendor in a more holistic light, given what is at stake. Another aspect that commercial print buyers are concerned with is the steps that need to happen to ready the job for mailing and distribution. That could involve collateral presort, barcodes, shrink wrapping, or other value-added services. Commercial printers that are equipped to handle all of the potential print tasks under a single roof represent a significant value proposition.
Commercial Print Buyers are people too. Taking the time to develop relationships with multiple vendors, such as a commercial printer, a shrink-wrap provider, barcode and presort vendor, lettershop and fulfillment vendor, mailing and delivery vendor, graphics, and more, frankly takes too much time and energy. Therefore, commercial print vendors that can offer a one-stop-shop under one roof can offer a higher value proposition than competitors who are unable to meet that bar.
Sell the Value and Not the Price
Value propositions are the nexus of all transactional commerce. It's true that a large part of the purchasing communities, both B2C and B2B, are price-conscious. That's not going to change. However, when pricing is too low based on the market averages, the buyer should remember the age-old adage, "caveat emptor," which means "let the buyer beware."
Government bids and RFQ submissions that are too low based on market averages are not a guaranteed win. In some cases, the government procurement officer will kick out a bid that is priced too low. That said, vendors who compete for government contracts know that the procurement goal is to award the contract to the most responsive and competitive offer. In other words, the proposal that delivers the best value at a competitive price, even if that price is higher than other bidders.
Further, when a prospect can recognize the value, then pricing becomes easier. Why? Once a value statement is understood, that value statement rises to the top of the competitive market, allowing for nearly 75% of the sale. In some cases, as with the government value statement, a strong value proposition can win out over price.
There are tons of examples where buyers purchased the higher-priced offering because of the value proposition. Therefore, it would be a good idea to construct presentations based on the value, which includes features and benefits, and, most importantly, the total cost of ownership. By tying the value proposition to the cost of ownership, odds are stronger that prospects and buyers will appreciate both value and price.
Make no mistake. In the world of sales, everything comes down to price. That said, pricing alone will not win all battles. Therefore, you should not lead with pricing, although many prospects will attempt to level set the vendor based on price, before realizing the value proposition. You get what you pay for in the majority of cases out there, and most buyers know this. Therefore, to make your pricing more attractive, the art of offering a competitive value proposition first, followed by pricing packages and bundles, has a better chance than Colin Kaepernick of moving the ball into the end zone. Thanks for reading "How to Sell Value Not Price."
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