Stop obsessing over price and start obsessing over value
Are you selling value? Or something else?
This is the most critical question in business. What's on offer; does it hold value, and if so - how much, and then - how much do you charge for it?
Ultimately, your business is a value delivery vehicle, and the lubricant that makes the engine run, is pricing. More importantly, the way to make sure your business is sustainable is to pin your pricing to value, and not the cost of goods.
This is where the idea of a Value Merchant comes in.
Being a Value Merchant is the core idea behind the book "Value Merchants: Demonstrating and Documenting Superior Value in Business Markets". I read a summary of it this week and was struck by the power of trading value. When you look at it, you realise your price does not necessarily have to be the lowest, as long as value delivered is relatively high!
The critical question then: do you know how much value you add to your customer's business and how this stacks up against the competition, or more accurately, the next best alternative? Note, the next best alternative is not always a direct competitor: a beer could compete against a bottle of water or a cup of coffee...
Who is your customer's next best alternative? How much value do you typically deliver in comparison, and where do you set your price?
No doubt, when I am in a desert about to die of thirst, I'll pay anything for a Coca Cola. This is what a Value Merchant knows.
This is the most critical question in business. What's on offer; does it hold value, and if so - how much, and then - how much do you charge for it?
Ultimately, your business is a value delivery vehicle, and the lubricant that makes the engine run, is pricing. More importantly, the way to make sure your business is sustainable is to pin your pricing to value, and not the cost of goods.
This is where the idea of a Value Merchant comes in.
Being a Value Merchant is the core idea behind the book "Value Merchants: Demonstrating and Documenting Superior Value in Business Markets". I read a summary of it this week and was struck by the power of trading value. When you look at it, you realise your price does not necessarily have to be the lowest, as long as value delivered is relatively high!
The critical question then: do you know how much value you add to your customer's business and how this stacks up against the competition, or more accurately, the next best alternative? Note, the next best alternative is not always a direct competitor: a beer could compete against a bottle of water or a cup of coffee...
Who is your customer's next best alternative? How much value do you typically deliver in comparison, and where do you set your price?
No doubt, when I am in a desert about to die of thirst, I'll pay anything for a Coca Cola. This is what a Value Merchant knows.