Jun 19 2007
Tell them that you’ll beat any price…
… and you force your customers to consider your products and services a commodity.
I was listening to the radio and the car salesman from Bill Buckner Motors said, “Not only do we have the best service around, but we’ll beat any price.”
So, I got to thinking. Do people buy cars on price alone? The salesman said they had the best service. He told me that he would take care of me. Then he said that his price can’t be beat.
Well, it may be true, but I was wondering what is he really trying to sell? Is he trying to sell the exceptional service or is he trying to sell the best price? Or, is he just trying to keep from having to identify his target market by assuming that everyone will want his car?
I wonder if there is an internal marketing struggle in the car business. They want to be the best to everyone, but fall back on old school marketing tactics all the time.
Incidentally, when I was going to buy a new truck a few weeks ago, I talked to one of their sales reps on the phone. I asked for a quote… never heard from them again.
So, I guess I won’t be getting the best service from them, after all.
If your product is a commodity… if people can get the same thing somewhere else, you will have to compete on price. If you tell them that you are going to compete on price, you don’t really have any place else to go.
Corey Smith is the Vice President of Innovation at Fisher’s Document Systems where he maintains a blog on business and technology.
Very interesting post!
I completely agree: focus on price creates price oriented customers, that ask for focus on price, that creates more price oriented customers, etc.
Eventually, this vicious cycle should be broken with value creation (and showing the created value!)
But how do you break the vicious cycle? Sales reps have a quota they have to meet every single month. They aren’t paid on how happy the customer is. They are paid on more business.
That’s basically the problem, sales quotas!
In recent discussions, someone said “the more we try to sell, the less we sell, and viceversa!”.
There has been a lot of focus on market share, and very little on profitability for the last two decades… We are here for a profit, not for sales. That is a fact. So, first, break the commission schemes. Put something else: profit, customer satisfaction, fixed salary.
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