Solve the problem, maintain respectable margins and gain a customer.
For most manufacturers, it doesn’t necessarily matter how well you do on price, as long as you are in the ballpark.
How many times have you heard the phrase “You get what you pay for?” Customers have heard it too, reaffirming that you do not have to compete on price in today’s market.
The following quote is often attributed to Victorian-era art critic John Ruskin* and these words still ring true to this day:
There is hardly anything in the world that a man can not make a little worse and sell a little cheaper. And people who consider price alone are the man’s lawful prey.
It is unwise to pay too much – but worse to pay too little.
When you pay too much, you lose a little money… That’s all.
When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balance prohibits paying a little and getting a lot… it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.
What I’m getting at is that, from time to time, consumers can skimp on price, but if they have a poor experience (before or after the sale), you can be nearly certain they will not repeat their business.
Therefore, you should not be competing on price alone. Even if your product isn’t substantively differentiated from the competition, price will never be the sole factor that determines who a customer purchases from.
Often, when manufacturers try to compete on dirt-cheap prices, service or quality is the first thing to suffer. And in either case (as the quote above points out), “you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do.”
You’re not selling them a price. You’re selling them a solution to their problem. Maybe they need the product quickly. Perhaps they need an assurance of quality. Sales and industrial marketing is still about people interacting with people, even with the integration of automated marketing.
You’ll never fail if you can get to the root of your potential customer’s problem and offer them a tailored solution.
*Some dispute the actual actual origin of the quote.
Photo credit: Daquella manera