There are eight basic ways to defend against a lower price. Master them all, and you'll spend a lot less time negotiating and a lot more time closing deals. These eight, great differentiators are the keys to defending a high price against lower priced competitors:
- #1: Feature. Something in your offering is different than the competition's. This can be something major (like a key technical feature) or something trivial (like a color).
- #2: Brand. The customer is accustomed to purchasing your offering and automatically thinks of it as superior, or buys it more or less automatically when confronted with a choice.
- #3: Convenience. Your product is easier or cheaper to purchase, or can be delivered faster, or can be replaced faster, or is easier to get serviced.
- #4: Quality. Your product, even if exactly identical otherwise, is better made, lasts longer, and/or has better support and service.
- #5: Personality. The customer prefers doing business with you personally, because you've built a long-term relationship.
- #6: Integration. Your offering fits better with other products that the customer is going to purchase or is likely to purchase.
- #7: Mutuality. Your business relationship with the customer is important to the customer's customer. (E.g. "we only buy the best components.")
- #8: Strategy. The customer perceives the relationship with you and your firm as strategically valuable. (e.g. "We work with ACME, so we're credible.")
Note that that, some of these differentiators (#2, #3, #5 and #8) can work even when you are selling the exact same product as the competition, but at a higher price.
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