If this loss of margin weren’t so painful, it might be funny. Because while price is almost always one of the criteria upon which a purchase decision is made, it is almost never the most important reason people buy. (Think about it. When was the last time you bought a product or service for which you had zero need or want… simply because it had a low price?)
Implications: We live in a time when the value proposition is more important than ever. How does your product or service impact the life of the consumer you serve? How does it enrich their family or their company? In what ways might the product you sell gratify the person who buys it? More than ever, companies, products and services must be presented in a way that illustrates their unique value proposition. Why?
Absent a unique value proposition, price becomes the default influence over every purchase decision.
In other words, if you’re not special, you’d better be cheap. Cheaper than Wal-Mart, or even Craig’s List or e-Bay. Can you quickly state your unique value proposition? Can your sales team? Can you build that value proposition into the greeting when people call your company? And is it the first (and final) impression people are left with when they enter or leave your building?
Recently, many retailers seem to be in a fierce race to achieve the lowest possible margin... focusing on pricing strategies that seem like little more than an auction.
While many are playing that game... few will win.
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