Do you find yourself competing on price over and over again? It’s frustrating, I know. Today I’m going to break down why this happens and what you can do to fix it.
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Why You Are Competing On Price
Do you find yourself competing on price over and over again? It is frustrating, I know. If you are in this boat, I have been there myself. Today I am actually going to break down why this happens and what you can do to fix it.
Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe you must remove your revenue roadblocks if you want to accelerate revenue growth. And if that is a goal of yours, we can help reach out and be happy to talk to you. Thank you so much for taking the time to tune in.
I decided to talk about this particular topic because based on a recent conversation that I had with a marketing manager, this marketing manager, I had this conversation several weeks ago, this marketing manager works for a managed service provider and an IT consultant. Here's the situation. They have a very clear understanding of who their ideal clients are. They're growing, right? Their ideal clients are within a very set geographic area of their location. So I felt like they had a pretty good handle on who their ideal clients are. I looked at their website. They've got a pretty strong marketing message. It's different than what most providers in that space say. So I felt pretty good about their message. But they were still constantly competing on price in the sales process, which is a problem.
This is a competitive advantage issue for them. Clients don't see them as different. Even though their message was different, it wasn't enough to push people over to seeing them as different. Their prospects are seeing them as a commodity, just like all of their other competitors. As a result, their prospects default to objecting on price.
How do you fix this? You need to create a competitive advantage. You need to have differentiators in your business that make you the logical choice. The only way they can get what you offer is by working with you. That's what competitive advantages and differentiators do for your business.
What I'm going to run through, I'm going to run through four things to help you with this today. If this is something that you're dealing with, one is the simplest way to look at starting to create a competitive advantage. The second is some brainstorming questions that will help your creative juices get going so that you can really hone in on this. The three criteria for a competitive advantage and how many differentiators or competitive advantage elements do you need?
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Simplest Ways to Create a Competitive Advantage
Let's dig into the simplest way to create a competitive advantage first and foremost. I think there are four elements of value that are the easiest place for you to start digging to figure out how you can create a competitive advantage. Those four things are one, how do you save or help your clients make money? One or the other or both. Right. How do you help them save or make money? The second is how do you help them save time? Third, is, how do you help them reduce risk? And the fourth is how do you help them eliminate hassles? Any one or all of those four elements can help you create a competitive advantage or a differentiator for your business. Another really powerful way to create a competitive advantage is offering a guarantee. Can you offer a guarantee of some kind? Excuse me? Now, when you offer a guarantee, a lot of times guarantees do reduce risk in working with you, right? But sometimes your products or services also reduce risk in them running their business. Okay? So there's two different types of reducing risk there, but these four elements, I think, are the easiest place to start digging when you're looking at how you can create a competitive advantage. So save money or make money, save time, reduce risk, and eliminate hassles. And then if you can offer some type of guarantee, that can be a great way to create a really strong competitive advantage.
Questions to Ask that will Help Get to your True Competitive Advantage
Now some brainstorming questions to help get your creative juices going and just start brain dumping on this to really help you hone in. First question, what is non negotiable in your industry? The reason you want to ask this question is anything that is non negotiable you cannot use as a differentiator. It's not going to be a differentiator. They're table stakes. People expect you to offer this. A lot of people talk about, oh, we offer great customer service. Everybody expects that. Okay, that's table stakes. That's just non negotiable. So get those nonnegotiables out on paper on the table so that you can cross them off the list because none of those things are going to help you create a competitive advantage. The second question is, what is it that is really different about your business? What is it that really differentiates your business? One of the ways that you might be able to help answer this question more accurately is actually interviewing some of your ideal clients and asking them, what's different about us than some of the other providers like ours that you've worked with in the past. Okay? That can be really, really helpful because sometimes when you're asking yourself these questions, it's really hard to think objectively about your business because you're just too close to the fire. Then the third question is, what's the excitement for the client, right? What is absolutely going to blow them away? These latter two questions is where it's really going to help you start to hone in on what your true differentiators could be, okay?
The 3 Criteria your Competitive Advantages Must Meet
Now number three is what are the three criteria for a competitive advantage? I think any competitive advantage that you come up with needs to satisfy these three criteria to be really strong. One is, is it true? We don't want to go out pedaling something that's not true. That's just going to come back to bite you in the end. Not a good thing. So is it true? Two, is it relevant to your ideal clients? If it's not relevant or appropriate for them, they're not going to see that as a differentiator they're not going to value it. Number three is can you prove it? If you can't prove it, people aren't going to believe it. And if they don't believe it, they're not going to see it as a differentiator and you go back into that commodity group, not good. So the three criteria is it true? Is it relevant to your ideal clients? And can you prove it? Last but not least, how many of these differentiators or competitive advantages do you need? You can get away with one, honestly, but I think shooting for somewhere between three to five is a good place to be because every differentiator you have is just going to keep leveling you up and putting you further and further above your competitors. The further you are away, the more logical it becomes that you're the only choice that they have. Because if they want all these things that you offer, you're the only place that they can go. They cannot get those things from your competitors. So I think three to five just puts you so much further ahead of your competitors that you're the logical choice they have to do business with you.
Conclusion: Why You Are Competing On Price
So I hope you found this helpful. Man, especially in the beginning, I think so many of us compete on price, and it is a horrible place to be. Competing on price is not a competitive advantage. Offering the lowest price is not a competitive advantage. You've got to create competitive advantage in a different way. And so I hope you found this helpful.
If this is something that you need outside eyes on, head on over to our website over at rialtomarketing.com. I would be happy to jump on a call with you. If you're over on our website, you can book a free GPS call. On that GPS call, I'll take the time to give you some guidance on the best direction for your business based on where you are and where you want to get to. The other tool that I've got for you is over at RevenueRoadblockScorecard.com. RevenueRoadblockscorecard.com over there, we've created a scorecard to help you get visibility to your revenue Roadblocks. The scorecard will help you discover and assess which of the nine Revenue Roadblocks is slowing down your business growth. It takes less than five minutes to get your personalized results. There's a ton of value in this scorecard. We did not hold anything back. So head on over there, check it out. I think you'll be super happy with the information that you get.
So thank you so much for taking the time to tune in. Till next time, take care.