At the end of the day, price is the elephant in the room. On the business front, it traditionally carries the most weight in any Leadership Team’s decision-making process. We know the budget-savvy CEO will ask herself: why pay extra for a service when it’s offered half price elsewhere? This tends to be the case in many business transactions.
However, other points of value have increasingly entered the conversation: turnaround reliability, industry specific knowledge, creative innovation, etc. If a service provider is able to effectively communicate their multiple points of value, chances are that budget-savvy CEO will pay a little more for the higher quality service. The webinar “Transforming Price into Value for Your Service,” hosted by InfoTrends’ Barb Pellow and sponsored by Canon Solutions America, breaks down how service providers create meaningful conversations in order to achieve long term partnerships with clients. John Smilanich, National Sales Director at First Edge Solutions, expands on Pellow’s overview with concrete examples on how his company has solidified their position as a partner versus vendor. The webinar covers topics including: what buyers want, price versus value delivered, the evolving definition of ‘value’, and how to communicate that value.
Specifically, I found the section on the differences between ‘vendors’ and ‘partners’ to be quite helpful in understanding how to position one’s business goals to a client. As outlined, vendors promote or exchange goods and services for money; however, partners go a step further to participate in a relationship in which each member has equal status regarding a project. Vendors have customers; partners have clients. Vendors provide data, but partners take their provided data and interpret it, analyze it, and make recommendations. Vendors take orders and make sales, where as partners work to build mutually beneficial relationships and to determine why their clients want what they ask for.
Once the service provider has determined what role they want to play, i.e. vendor or partner, it is important to present additional components of value to the service already requested. Helping the client understand these additions in real dollar value can only strengthen the service provider’s position against a competitor’s. As Barb highlights: “Value is now associated with setting up the business model. You now help set up project data bases, manage campaigns, and help execute or market the campaign.” To accomplish this, John suggests to “make it as individual as possible.” By defining your buyers and by defining your niche, you create a knowledge base that down the road surpasses the weighted value of ‘price’.
Not only were Barb and John’s tips helpful in breaking down the price barrier, but their examples, case study references, and self-assessment questions offer tremendous insight on how to increase value proposition. If you’re looking to broaden your communication skills and positioning insight, this is a must see!