It is likely that the title of this article seems paradoxical, and even a joke, which does not surprise me, since the vast majority of owners and managers of small and medium-sized companies will be totally convinced otherwise; the lower and ridiculous the prices of your products and / or services, the more they will sell.
This philosophy could be valid up to a certain point, however, you should not lose sight of the fact that for a strategy focused solely on price competition, it is an extremely exhausting strategy, which can lead you directly to hang a sign of "For Sale", " Transfer "or" Settlement by Closing "
If you focus all your competitive advantage, all your efforts and resources on finding new ways to lower prices, you will be getting into an increasingly dark and gloomy tunnel, where it will be very difficult to see the light again, usually when The light is seen again, it is not exactly the departure, it is a train that comes in the opposite direction, when there is no time to react… Everything ends.
By this I do not mean that competing by price is the worst, or the best, that should be determined by you, but without a doubt, it is not the most convenient for a company, for the simple reason that larger companies will ALWAYS come, with greater resources or higher risk margins, which can ridicule your price, and ruin everything you thought you had built.
When this happens, the entrepreneur realizes that he should have differentiated his business, but generally, it is too late.
There are some statistics that you should know and analyze. In general terms, some of these statistics agree that 8 out of 10 companies that open their doors, do not even reach the fifth year of life… Have you read it correctly?
Of every 1000 people who start a business, 800 have a practically guaranteed failure, but it is not only the 800 people; There are 800 diluted illusions, 800 families that have probably mortgaged part of their lives, to see a dream die that they believed triumphant and invincible.
Don't assume your business is invulnerable to these statistics, because any small business can suffer the same fate, unless it acts accordingly.
One of the causes that have had the greatest weight in these statistics are those that arise from the popular belief that ensures that, to be successful in business, the most important thing is to have the lowest price.
Having this statement as an absolute truth is the cause of great misfortunes in the business world, since, if this is true, why develop a differentiation strategy or Unique Selling Proposal? Why worry about the positioning ?, Why break your head in discovering the hidden assets of the business? What is the use of innovating? What is the need to orchestrate a plan of internal and external actions to ensure that the client experiences our difference? Why invest energy in seeking excellence and coherence between the theoretical strategy, internal application and external communication? Why take customers into account if we are convinced that what they value is the lowest price?
Have you ever sat down to reflect on the most successful products and services, the most prestigious and of course, the best sellers. Haven't you noticed that they are NEVER the cheapest? Do you think McDonald's is the cheapest hamburger? Which Rolex is the cheapest watch? Which Nike or Reebook are the cheapest sportswear? Do you think Mercedes Benz is the cheapest car brand? Oreo is the cheapest cookie, or what Fedex is the cheapest postal service?… Is Coca Cola the cheapest soda?
See what I mean? These are just some examples to take as a reference, but I invite you to delve into any successful brand or company that you know, and that they do not necessarily have to be global companies or brands, and see that they are NEVER the cheapest, and if they are, which I doubt, they do not focus their entire strategy on the price, since it is offered as an additional value or attraction for the client, but it is NOT the main reason why their clients buy from you… Investigate and convince yourself.
But now comes the most important thing. These same brands or companies (products or services), which are the best sellers, and which are not the cheapest, do you really think they are the best? Are they the highest quality?… Are you sure? How and who measures the quality of these brands, and on what criteria is this quality determined? Do you know someone who can show you, in a practical, tangible and scientific way, that the McDonald's hamburger is better than the ones made in your favorite bar?
No one knows for sure if these are the best products or services, but they are not what interests us the most. What is really important, and it is the lesson that you should learn and apply from this article, is that these brands have managed to create a certain perception of quality and differentiation in the minds of each consumer. They have learned, from the beginning, to play the game of difference and have acted in a constant, coherent and focused way with their difference, until they have positioned themselves in the minds of the people who make up their market (local, provincial, national or global).. And now, once they have positioned their difference, they have the luxury of lowering prices and running exceptional offers and promotions.
Those companies were also small like any other, and not only did they survive these fatal statistics, but they became leading brands, thanks to NEVER focusing all their energy on having the lowest price, neglecting its true value.
To end the examples, I would like you to reflect on the following:
If a car dealer offers you to buy a brand new Jaguar, Lexus or Mercedes for $ 9,000, would you buy it without thinking to take advantage of the great opportunity they are offering you?
If you are a prudent person, the first thought that will haunt your head is that there is a "trapped cat" and that they want to scam you. Simply, because deep down, neither you, nor I, nor anyone else, ends up believing that Bueno, Bonito y Barato, can coincide in the same product and / or service. It is not true? Well, the same thing happens with your clients.
If you strive to stand out and compete with the cheapest price, without enhancing your difference, you have no doubt that no one will take the quality and professionalism of what you offer very seriously. Quite simply, most of your clients will have the perception that the only thing that suits them about your business is the economic advantage they see in it. This will be your only loyalty weapon, so if a company of your competition enters into your same game (that of the price), they will only have to make sure they have it lower and communicate it to their customers. Usually this will be enough to get hold of your wallet… It's that easy.
You must do everything possible and impossible to identify or "create" your difference. You must promote the main reason why your current clients buy from you, or the reasons why your future client will buy from you.
Don't keep selling yourself the idea that developing a difference strategy is an extremely difficult task, and reserved for the great Gurus of marketing. Your main weapon is your common sense. Put it to work for your benefit and that of your business.
Start by discovering, why do your current customers buy from you? What is the most powerful reason that motivates them to buy your products or services, without having the price as a reference?
What you are really selling in your company is probably not what you think. Do not assume that your company sells accounting services, cars, homes, food, technical service, industrial equipment, toys, home furnishings, telephones, cleaning services, etc… If all companies sold the product or service that becomes evident in the eyes of the customer, then… why do some companies succeed, while others fail, if they "supposedly" sell the same thing?
Your clients are looking for a benefit in your business, they seek to solve a problem they have or see coming. They look for the personal advantage that the product or service you offer them provides, and you must do everything possible so that this advantage is not only economic.
Your customers are not buying from you for "the love of art," or for the simple fact that you are selling them a product or service; They buy because the sale strikes a sensitive chord in their mind and its resonance makes that person want to experience the advantages and benefits that your product or service offers, and that, at the same time, solves a problem.
Do your research and find out why they buy from you. Pay special attention to the perception that your current customers have of your business. Ask them questions like: What do you really like most about our business / service / product? What do you like the least, or do you think we could improve?
Have you ever recommended our business? If you have, what made you stand out in recommending it? And if it hasn't, why? What would you highlight as special about our business / service / product. From your point of view, what should a business / service / product like this (yours) have, to be ideal?
Do your best to keep things simple. If for the moment you cannot seek help from external professionals, develop yourself a strategy that differentiates you from your competition and that allows you to begin to occupy a more privileged position in the minds of your clients and prospects (potential clients). The process to find your difference, goes through discovering:
• The benefits and advantages that your business currently offers to your customers.
• The benefits and advantages most sought after and valued by your current clients and prospects.
• The benefits and advantages that, consciously or unconsciously, your main competition promotes and sells.
• And with all this information, determine (decide or create) the two or three main benefits and advantages that will differentiate you and on which you will focus all your positioning work. That simple
Now, if you want to develop a truly effective Difference Strategy or Unique Selling Proposition, keep in mind to involve your entire team in the process. Seek the participation and consensus of your entire human team, since true excellence is achieved when each member of your company acts, breathes and lives the strategy, in a coherent and harmonious way.
Once you have determined the benefits on which you will focus your Differentiation Strategy, you should not be content with the simple fact of "communicating" them in your marketing actions. Together, you and your team must develop and implement a set of concrete actions that make it possible to orchestrate this difference, and "guarantee" that your client sees the expectations created in external communication met and exceeded.
When you have determined the main advantages and benefits that will differentiate your business, you must be aware that this strategy will be the backbone of your business, which will allow you to maintain coherence and focus in each and every one of your commercial actions, and the one that will govern how things are done in your business, from the telephone service to the type of uniform.
When the strategy is developed and executed correctly, involving the entire human team, and ensuring that there is always harmony between the theory, its internal application and external communication, the business reaches unsuspected levels of excellence, and begins to germinate its own identity that It will make it more appetizing in the eyes of your customers and prospects, even when there are many other businesses that insist on continuing to play at having the lowest price.
Simply, you will be positioning yourself, not as the cheapest, but as the one with the most value, at least for your client. Don't you think it's worth it?
A good advice: try to investigate and discover, what is the biggest complaint that the target audience has, in your market or industry, since, in general, a complaint that is positioned in the minds of your potential clients, is a clear benefit that they are not experiencing, neither from your business, nor from competing companies.
