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How to Compete In a Cost-Sensitive Market

Shane Mills

April 19, 2007

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So often many business owners make the mistake of slashing the price of their goods in order to be competitive in the marketplace today. When asked to submit an RFP (Request for Proposal), the first thing they do is to lower the price, thinking that this gives them an added advantage.

However, price is not the main consideration in determining the success of your submission. Value-for-money or ROI (Return on Investment) - "bang for their buck" is perceived to be a greater pulling issue.

You would think that this was obvious, and yet you would be surprised how many people still think that lowering their price is the only way.

Most proposals do not highlight the value for money of their product. They make a long list of the features of the article and mention the price at the end, as an afterthought.

A better result would be achieved if their article pointed out the value for money, not "how much it will cost".

4 Ways to show "value for money"

1. Offer a better quality service. By doing this, you minimise errors. This will save the customer money in the long run.

2. Give them a faster result. In this way, they will save time by being up and running sooner.

3. Offer them a longer result. What this means is that they can be in operation for longer and the article will not need replacing as quickly.

4. Give them a better result. With a better result they can make more money, as well as increase their bottom line.

Write with the buyer in mind. So often people make the mistake of pushing the features of their product and their company, instead of highlighting the most important fact. When you're trying to sell someone on your product or service you need to give them a feeling of "what's in for them". Don't list all the features of your product i.e. "it has four legs, is 4ft in length, 3 bolts, and nuts and can open doors".

Sell the benefits of your product or service.

If you offer a better quality service:

Point out to your customers why it is better and what's in it for them.

If you sell something and it lasts longer:

Give them examples of how and why it lasts longer. State clearly in your proposal that it lasts longer, which means that it won't need to be replaced as quickly, and therefore, is worth the price.

If you sell something and you get it to them quicker:

Mention that because you can deliver something quicker, then they can make use of it sooner. This must be a cost saving to them.

If you give them a better result:

Point out why it gives a better result.

Take the Focus off Price and show how they get value for money.

* You offer a better quality service

* You will get the product to them sooner

* You will give them a better result with your product

* Your product lasts longer

Offering them a result that is 200% better, for a 40% higher price, is a much better option than just a cheaper price.

To find out how we can help you compete without slashing your prices go to Words That Sell.com.au

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