Joe complained that his customers care only about getting the lowest price.
“We struggle to be competitive and still offer more than our competition. But when push comes to shove, we do what we’ve always done and wind up negotiating only our pricing. We can’t grow by operating like this.”
I asked why he was convinced that price was his customers’ primary decision driver.
It turns out that Joe never asked his customers why low prices are their biggest concern. In other words, he was missing opportunities to learn more about what is most important to each customer, the challenges each faces and how each operation makes money. His business was doing what it had always done, but that’s no longer good enough and it’s not an acceptable no-growth excuse.
One of the benefits of our free enterprise system is that it compels businesses to continuously improve quality, service and value. Competition forces every company to progress, to innovate, to be more creative – or to be left behind. Joe’s customers’ expectations about quality and value keep rising because they must remain competitive.
Because Joe’s company is perceived as offering nothing novel or compelling, while concurrently demonstrating no interest in understanding his customers’ business, the message being communicated to him is one focused on getting the lowest price.
The only way to escape from this commoditization trap is to learn how your business can help your customers meet their challenges, get stronger and grow. Being advocates for your customers is the most productive growth strategy.
What are your customers’ unmet, unstated needs?
How could your creativity and innovation produce greater value for them?
