How to Avoid Competing on Price
I helped
a company that sells computer disks and hard drives
directly to consumers.
The global market is flooded with these commodity products,
and with companies eager to sell them.
They asked me, ‘How can we avoid lowering our
price when other suppliers are always ready to drop
their price lower than ours? How can we cultivate customer
loyalty without discounting ourselves right out of business?’
The answer to this dilemma was to deliver more value
than companies who compete only on price. But how do
you add more value when the product is a commodity?
This company became a fountain of useful ideas, timely
information, practical suggestions, cost-effective check-lists,
interesting case studies and best-practice techniques.
This hard drive company sends customers and prospects
monthly e-mail messages of value, including:
• Reminders to
back up critical data weekly (who sends that message
to you?) •
Proven ideas on how to manage volumes of data easily
in folders, files and storage libraries
• Rotation patterns for data backups with the benefits
and drawbacks of each approach
• Easy ways to gain user participation in safe
computing and data backup procedures
• A comparison of various options for backing up
data onto disks, tape drives, CDs or websites
• Current case studies of major computer crashes
and restoration results
• Ideas for backing up and synchronizing your data
while at home or on the road
• Screen savers reminding users to back up their
data regularly
• Cost analyses of doing data recovery and restoration
with and without current backups
• Techniques for keeping paper backups to correspond
with digital records
• Interesting milestones in the history of hard
drives and information on the latest in data storage
technology
Of course they don’t give ALL this information
to every customer or prospect all at once. Rather, they
trickle it out over time, keeping their company top-of-mind
throughout the year and first-in-mind when their prospects
and customers are ready to buy.
Key Learning
Point
Focusing on product
and price keeps you in the same arena as every other vendor,
scratching each other with deep discounts until everyone
bleeds red ink. Don’t go there! Instead, build a
better reputation by informing, educating, managing and
motivating your customers to think frequently about
you and then to take their buying actions to you.
Action Steps
Think of the ways
customers use and abuse your products and services. What
are the top tips for getting maximum value? What are the
most common mistakes? Put these insights into easy-to-follow
checklists. Write a ‘best-practice case study’
revealing how your smartest customers create maximum business
value. Has your company grown, changed or improved over
time? Explain this in a story that highlights your continuous
commitment. Take these articles and send them out by e-mail,
post them on your website, insert them with your products.
Don’t reduce your everyday prices – increase
your everyday value!
Next Article in Customer Service Value Dimensions >>
Customer Loyalty - in the Hospital?
First Article in Customer Service Vision >>
100% is Not Enough. You Need 120%
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Ron Kaufman is an internationally acclaimed customer service training educator for quality service.
He is author of the bestselling series "UP Your Service!" and founder of
"UP Your Service College".
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