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Creating a Unique Selling Proposition Based on Price (But Not Low Prices) for Industrial Products & Services: The “Price Marketing” Method to Make Your $20,000+ Solutions Easier To Buy

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Whether you are selling face-to-face, via social selling, on the phone, through retail, or via e-commerce channels, positioning your company and product to be unique and valuable is one of the most difficult challenges.

Look at the table below and determine which condition best reflects the situation of your company and product or service.

 Known to MarketUnknown to Market
Unique ProductMost desirable situation. Use all available general and performance marketing strategies.Communicate your solution to the market. Use performance marketing.
Commodity ProductCreate uniqueness and communicate to the market. Use performance marketing.Most difficult to sell. Establish uniqueness and awareness. Use performance marketing.

If you find yourself unknown and selling a commodity product, it will be almost impossible to sell. You have to change this situation relatively quickly to survive. You probably cannot afford enough advertising to use general advertising to change this situation significantly.

Performance marketing is probably your best alternative. A well targeted audience using performance-based tactics with a dynamite offer may generate some success. This situation is a difficult one at best and you have to work to establish uniqueness and awareness at the same time.

If you have an unknown product or company but truly offer unique features and benefits, the communication mission is well defined – make the marketplace aware of your solution. Again, performance marketing can be ideal.

A known commodity requires you to develop a unique proposition that allows your customers and prospects to understand why you are unique in your offering. You will have to establish uniqueness in your company or distribution approach.

The objective is to become known and unique. If you are an exceptionally large company with an unlimited budget, general “broadcast” advertising can be remarkably effective to position your company and create awareness.

This approach is typically effective in consumer product marketing. B2B marketing narrows the target audience and requires better targeting of the message and the media. LinkedIn ads, direct mail, social and phone selling and targeted online and offline advertising seem to work best in the business universe.

The Changing Environment of B2B Marketing

The competitive selling world has changed dramatically over the past several decades. In the past your primary concern was whether you could win the order. Today, you not only have to be concerned about winning the order, but whether winning the business will create enough profit to justify making the sale.

Let’s discuss:

  • how the environment has changed;
  • what common solutions have been implemented and why some of them have not worked;
  • what the customer is really looking for in making a buying decision;
  • how to use the customer’s buying criteria to set yourself apart from your competition;
  • and how to begin increasing both revenues and gross profit margins.

A good deal of the pressure in generating adequate profit margin is caused by selling products that are perceived by the buyer as commodities. Commodity products are those products whose function is readily available in the marketplace from multiple vendors at about the same price.

Commodity products in the B2B market are typically undifferentiated products or services that are widely available and interchangeable with those offered by other companies.

Examples of commodity products in the B2B tech field include:

  1. Computer hardware components such as memory chips, processors, and hard drives.
  2. Networking equipment such as routers, switches, and hubs.
  3. Office software such as word processors, spreadsheet programs, and presentation software.
  4. Cloud computing services such as data storage and processing.
  5. Raw materials and components used in the manufacturing of tech products, such as silicon wafers and LCD panels.

Note that while these products and services may be considered commodities in the B2B market, they may not necessarily be considered commodities in the consumer market, where they may be differentiated and marketed as premium products or services.

Just about anything that is manufactured and subsequently sold through a third-party or in-house dealer/distributor network, may be classified as a commodity.

Cloning Products and Services

In today’s marketplace, most successful commodity products have been cloned. The success of this strategy has made cloning a game in which anyone can play. Manufacturers, SaaS developers and service providers can now wait until a new B2B solution is introduced and established in the market.

Once the product has gained success and developed demand, a cloned version becomes a natural progression.

By reverse engineering, a similar product can be brought to market without the costly burden of product development or the financial risk of product failure. Obviously, these cloned new products can be priced substantially less than the original. The original developer and manufacturer must reduce his price to compete with the clone.

The art of selling simply becomes who can provide the product at the lowest price.

Other factors contribute to the changing face of the competitive marketplace. Buyers now have the idea that price should be the primary criteria for selecting a vendor for a commodity product. The vendors reinforce this concept.

When faced with a competitive situation, salespeople will attempt to sell their management on lowering their price to win the business and to maintain a relationship with their customer. Many companies give the buyers just what they want… a lower price. In other words, the selling company gets lazy and takes the order as easily as possible.

When your price and margin are reduced, you often lose the extra profit needed to create true product differences. As a result, many products look and act alike.

We have all heard a salesperson saying, “It’s just as good as a Brand X.” The sentence really describes the problem we are all facing.

Many product lines are produced by generic providers and are often given private labels. In fact, often similar products from competing companies are exactly the same. There is no functional difference in these products, only in the packaging and marketing.

We as vendors are doing an excellent job of convincing customers that price is the most critical issue. With all other factors being the same, the customer should buy the least expensive item available because all the competing brands do the same thing.

Imagine what this approach to selling is doing to the salesperson. Instead of the salesperson taking the fight to the customer’s location, the new arena for the battle becomes the sales manager’s office where they fight to have the price reduced.

Sales skills deteriorate because selling is not part of the equation if the buying decision is made strictly on price. Instead of trying to convince prospects and customers to buy their products, many salespeople spend most of their energy attempting to engineer the lowest possible price.

Everything I have discussed so far seems to paint a hopeless picture of gloom, doom, and consistently declining profits. The following changes are placing tremendous pressure on traditional sales activity.

  • Cloning can rob products of their uniqueness.
  • Reduced profit margins make it more difficult to develop true product differentiation.
  • Customers and vendors are using price as the primary buying criteria.
  • Sales skills are deteriorating due to lack of use.

The most successful companies work hard to establish unique offerings to surround their products. These companies bundle their products into packages which serve to differentiate them from their competition and give the customer a reason to buy on something besides price.

The bundle can consist of anything the seller feels will make their package attractive to the buyer. The bundle is supposed to make the difference.

The concept of bundling is often referred to as added value. We have all heard this term and virtually every industry uses it. I wonder if added value does not often turn into added cost.

Value Added

One of the biggest challenges a salesperson faces is creating a perception in the mind of the buyer that their product is unique. Most successful salespeople have found methods of communicating a unique selling proposition that allows them to win in most situations.

Customers treat many products as commodities. That is, the product function required by the customer is available from multiple vendors for about the same price. In trying to win the sale of the commodity product, the selling company is often forced to compete primarily on price.

Price merchandising robs you of the margins required to either enhance the selling offering or to develop true product differentiation between you and your competition. Either of these steps could move your product from the commodity status and allow you to create a true sales edge.

In addition, sales skills are deteriorating as customers and vendors alike use price as the primary buying criteria. As a result, prospects are forced to choose between comparable products, usually marketed in similar ways, to fill their needs. Given this scenario, the prospect makes the “from whom to buy” decision primarily based on price.

However, creative marketers expend a great deal of effort trying to establish meaningful reasons why a prospect should buy their product as opposed to a similar product offered by competition.

Merchandising, advertising, and sales presentations are used creatively to build product differentiation in the minds of potential buyers. The claims made in merchandising campaigns address either the function of the product itself, or the support package that comes with the product.

In some industries, heavy investments in value add services are made in an effort to distinguish one total package from a similar product offered by the competition. These bundled value added packages will often help win the business. However, for value add to have long term benefit, you should understand the long range implications of creating a package of services to surround your products.

Most value add services typically require substantial investment. The value added package must be created often over a long period of time. Depending on what goes into the package, the decisions about the contents will often have to be made long before the package is ready for delivery.

We live and work in an extremely dynamic world. What seems to be of excellent value today may carry little perceived value tomorrow. Therefore, investments in a value added package must be immediately available to the market.

This immediacy is the only way to capture the responsiveness of the market and generate the volumes required to recoup the investment.

Even if you can create a timely value add offering, prospects will still be able to take advantage of market forces working against you. In a market of competitive offerings, value add services are often used as part of the buying criteria for only the initial purchase.

Once the value added functions have been acquired as part of a transaction, they will often be ignored in subsequent purchase decisions.

Many value added functions tend to make the customer self-sufficient. These types of services enable the customer to ignore your offerings in future purchases. In addition, customers will often develop internal support systems, thus further reducing the dependency and benefit of your value added package.

It may also be difficult for a customer to assign a monetary weight to your value added services. This is not because the services have no value, but the benefits may be too subjective to establish a real dollar value.

Intangible benefits are often the most emotional and hardest hitting. But many prospects refuse to convert their emotions into tangible dollar values and will avoid involving themselves in this exercise.

Most business decisions involve a manager spending company funds. Their buying decisions will often be scrutinized by someone else in the company. Many of these managers are reluctant to pay for additional services that the company’s internal departments are supposed to be supplying. As a result, it is difficult to sell value added services, with intangible benefits, to company employees.

Value Added Services Get Cloned, Too

The real clincher is that if a value added service is of true significance to the marketplace, most competitors will be forced to offer the same service. What starts as a way to distinguish one vendor from another, becomes an “I’ve got it too” offering available from any legitimate supplier. This cloning of a value added package has the same impact as the cloning of a product.

But there is a significant difference when an added value is duplicated. When similar services are offered by competition there is no uniqueness to the added value service, therefore, the value added service becomes part of the commodity product. In other words, the value added service does not help win any business after the initial blush comes off the rose.

Once the service is introduced, it becomes very difficult to remove it from your product package. At least with product cloning, you do not have to incur additional costs. Value added cloning can raise your costs and ultimately still force you to compete on price.

Let me give you a real-world example. Several years ago, my friend purchased an in-car infotainment system for her car. This system included a display screen, a microphone, and speakers, and was designed to provide hands-free communication, video entertainment for passengers and navigation while driving. My friend drove to the vendor’s location and had the system professionally installed by a technician.

Some months later, her husband decided to also have an in-car infotainment system installed in his own car. He called the same vendor and was pleased to find out that they now offer on-site installation at his place.

While shopping around and comparing prices of this commodity product with other vendors, he found that most companies offer on-site installation for a similar price.

This is an example of a unique value added offered by one vendor which has now become a commodity practice offered by all vendors. The net result is that all the vendors have incurred additional expenses and reduced their profit margins. There is no uniqueness to this service. As I said earlier, if a service has true value it will be duplicated in the market.

Testing the Value Added Service

To test the true value of an offering, you should try to market the service on its own. By that I mean, customers should be willing to pay independently for the service if it is worthwhile. The easiest way to prove the real value of the service is to offer it to purchasers of your competitor’s similar products. If your competitor’s customers will buy your value add, you have really got something. If they will not, you should rethink your strategy.

You should also test your own customers to see if they will buy your value add as a stand-alone purchase. It is one thing to accept a service as a bundled offer and quite another to buy the service as an individual product.

After the preceding, you might think that I am against value added offerings as a means to distinguish you from your competition. Quite the opposite is true. I believe that adding value is the only way to create demand for your product in a price focused marketplace.

I am opposed to bundling items to make sales that will not have lasting individual worth. If the value added is offered at the same price at which the product used to be sold, then you are only adding expense.

How then do you compete? What can your organization do to distinguish itself from competitors offering similar products to the same prospects at the same price?

The answer is to create value that is:

  1. In constant demand from your customers
  2. No cost or low cost to create and implement
  3. Dynamic and responsive to the needs of the marketplace
  4. Easy to understand and use

B2B Decision Criteria

So far, I have explained the commodity-like attitude purchasers and salespeople have toward many B2B products and services. I pointed out how value add when used to differentiate one vendor from another has a very short usable life.

It has a short life because a service or package which truly adds value will be duplicated by industrial competitors. As a result, value add as it is most commonly used today quickly becomes added cost while offering no real competitive edge.

Value add, however, is the key to being competitive in B2B field. In order to compete profitably, value add must meet the criteria explained above.

Before you can develop a formula that will meet these criteria, you should understand what typically motivates people to buy. After discussions with hundreds of B2B salespeople I have concluded that there are 7 major factors in a prospect’s buying decision.

  1. Function – Will the product offered do the job required by the prospect?
  2. Availability – Is the product available in the time frame acceptable to the customer?
  3. Price – How much does it cost?
  4. Terms – When and how does the vendor expect payment?
  5. Service – How quickly can it be repaired if it breaks?
  6. Quality – How often is it going to break?
  7. Salesmanship – How much can the “from whom to buy decision” be influenced by the sales representative?

You can probably add other criteria that may influence the “from whom” decision in your B2B market. As an example, some salespeople feel that location, or proximity to the prospect, plays a major role in the “from whom” decision.

As you develop your own list of buying decision criteria in your industry, rank them in relative importance to the customer’s decision. Many salespeople, when faced with the ranking decision, immediately rank price as most important.

In many cases, price is the deciding factor. However, price can be a distant second if the B2B customer must have the product today, but the least expensive source cannot deliver for two weeks. In this situation, availability will probably be number one. The laws of supply and demand will overcome price if the need is great enough.

In fact, several companies have gotten rich using just this philosophy. They stock seldom used, but critical items and charge a premium price when a customer places an order. They can get their price for a potential commodity product because availability creates uniqueness.

For our discussion let’s assume that there are no special circumstances. As you rank the buying decision criteria, remember you are evaluating the importance of each element as it is perceived by the B2B prospect.

The table below shows a typical ranking of the seven criteria according to their importance to the customer.

CriteriaImportance to B2B CustomerSales Ability to Impact
Ranking buying criteria and its importance.

If two or more of the items were equal in their importance, you could rank them both the same. You will also notice that I have ranked the salesperson’s ability to impact each criterion.

The sales ability to impact the criteria should be ranked on a scale of 1 to 5. The higher the rating the more the salesperson can influence the prospect’s buying decision in that area.

Therefore, a 1 rating indicates criterion over which a salesperson has no control. For example, Function is rated a 1 because, regardless of the salesperson’s efforts, they cannot make the product do something it was not designed to do. A 5 identifies criteria that are entirely in the seller’s control.

For our discussion, salespeople are assumed to be territory representatives. Managers and senior executives can also complete this exercise but they may not be objective. Their desire to increase profits may introduce more opinion than fact in the scoring.

The table ranks both the B2B customer’s perception of what is important and the salesperson’s belief of how significantly they can impact each criterion. Notice that the items most important to the customer are those over which the salesperson has the least control. The following summarizes why each criterion received its individual rating.

  1. Function – The salesperson has little ability to impact the function of the current product line.
  2. Availability – The salesperson can influence this criterion by understanding the customer’s needs and anticipating future purchase requirements.
  3. Price – Surprisingly, salespeople have little control over pricing if a constant profit percentage is required. The cost of goods is relatively fixed, and businesses must sell at certain prices in order to cover expenses and make a reasonable profit. While price can be lowered, it will affect the profit objective and change the impact of the sale.
  4. Terms – Terms suffer from the lack of flexibility imposed by price. The more lenient the terms, the greater the profit suffers.
  5. Service – Salespeople can impact service by helping to solve customer problems. Although this sounds great conceptually, most salespeople do not become involved in service problems until it is too late. Very often the salesperson is asked to become involved in a service problem to smooth ruffled feathers or to get a customer to pay a service bill.
  6. Quality – Product quality is determined, in most cases, by the product development process.
  7. Salesmanship – At last… an item that can be controlled and impacted by the salesperson. Before you get too excited, look where salesmanship falls on your ranking in importance to the customer. And this is further complicated when selling commodity products. In many B2B situations, salesmanship is often reduced to one simple question… who got there first?

These are the most frequently used criteria in the industrial buying decision, and how most salespeople identify their ability to influence these factors.

On the surface, it does not appear that there is an awful lot the salesperson can do to control the buying decision other than get there first. I do not believe that is the case.

Price Marketing

The salesperson can have a significant impact:

  • if they are given the motivation to reach and exceed goals;
  • if the tools necessary to make them unique in the marketplace have been put into place;
  • and if they are trained to use these tools.

True salespeople can sell what they believe in, but they must understand the subject before they can truly believe in it. Training is the key to this understanding. In this section let’s discuss the sales tools and the training. Motivation is a topic all its own that will not be covered here.

In order to create the tools necessary to become unique in the eyes of the customer, you will have to combine the buying criteria with the requirements for real added value. Let’s take an easy one first – salesmanship. Remember, salesmanship is the least important element in the eyes of the customer but the one over which we have the greatest control.

Because salesmanship in a commodity product is often a case of “who got there first” you must implement specific business-to-business programs to constantly get information about your product and its unique value in front of the customer or prospect.

In effect, performance marketing becomes a catalyst demonstrating your desire to earn the prospect’s business. By letting performance marketing make the prospect call your sales force, productivity can be expanded and the odds of getting their first can be increased.

The face-to-face salespeople can concentrate on using the value added package to close profitable business in situations where interest and desire have been stimulated.

Generally, face-to-face selling cannot be totally replaced with a performance marketing strategy. However, sales productivity can be improved and enhanced with performance marketing, and getting there first is one of the most important factors in salesmanship when selling a commodity product.

Salesmanship can be enhanced with performance marketing, training, motivation, and management. These elements are within your control. Addressing the other elements is more difficult.

I have discussed how salesmanship can be enhanced and used to sell a value add. Let’s now look at the other criteria and how they can be used to create and sell a value add.

  • Function – Cannot be controlled by the salesperson.
  • Availability – In many situations the salesperson can use this element if they have been involved and working with the prospect. If the customer does not need the product immediately, or if it is readily available from other sources, this element will not be as important as price. In some situations this element can make a commodity product a unique offering. The downside to maintaining a product’s availability is the extraordinary investment required in inventory. You may have to carry excess quantities or line items which increase carrying costs and impede your ability to remain price competitive.
  • Price – This is a tough element to impact, particularly if it only refers to the invoice price. You can often change the perception of price by how it is defined and what is included. You need to discuss price in terms that are favorable to your selling effort. I will discuss this in more detail shortly.
  • Terms – This is definitely an opportunity for value add. You can use terms to create a value added unique selling proposition. I will discuss this in more detail later in this section.
  • Service – This is another definite opportunity for value add. However, if service translates to something that costs you extra, make sure your customers can identify a specific value for the service they are receiving. If you do not establish a recognized value for the service, it will become an added expense without giving you a unique value add when it is copied by your competitors. Do not reduce your margin with no real sales advantage.
  • Quality – This refers to product quality that a salesperson has little control impacting. Once a product is included in your inventory, you cannot control its quality.

Based on these elements, price and terms are the two factors impacting the customer’s buying decision. For the sake of this discussion I will blend the two together and discuss them as price. As I mentioned earlier, price is usually dealt with by lowering it. I want to show you how price can be used to generate additional revenue and also make you unique.

The most productive way to create unique selling solutions and compete and win profitably is to use third party financing or leasing to sell price. In essence, use price marketing to sell price.

Many companies will react to this idea by saying, “Leasing… We offer leasing today, but it’s not winning any business for us!”

They are probably right! But is because they are offering leasing and not using financing to compete and win. In most cases, they offer financing based on a customer request, and the discussion takes place after the sale has been made. By then it is too late to use this marvelous tool to impact the sale or the margin made from the sale. Or they go to financing as a last ditch effort before losing the business.

Integrating Price Marketing Approach Into All Your Marketing & Sales Activities

It is easy to understand why price marketing is not being used as the powerful sales tool it presents: most salespeople are not comfortable with price marketing. They are not trained in how to use price marketing and there are not marketing programs designed around the concept.

Not being conversant in price marketing, most salespeople and managers turn the deal over to a leasing company when the subject comes up.

The most important first step toward more profitable sales is to integrate a price marketing approach into your day to day selling activity. This can be achieved by realizing that most small to medium size businesses are concerned with monthly cash flow.

The ability to meet monthly cash requirements is always on the mind of the small business owner. By presenting your product in monthly cost terms to which your customer can relate, you will make it easier for them to buy from you.

For example, assume your product sells for $20,000, but that you regularly discount to $17,000. If your customer only has $14,000 in the bank they cannot make a buying decision because the money is not available. However, if you offer your product for less than $1,000 per month, you have created a different buying decision for your customer to make, and probably increased the odds of getting the order.

In addition, because the small business is so concerned with cash flow, by making the buying decision easier and compatible with the owner’s environment, you will increase your odds of winning.

You can also increase the revenue you realize from each transaction. Instead of computing the monthly rate based on the discounted price, use the list price. It is important to lead with a monthly fee that covers the lease price because your customers will probably want to negotiate to feel like they got a deal. You want to leave some room for negotiation.

Price selling creates other inducements or offers you can make to your customer. For example, rather than discounting the purchase price, you could offer to make a month or two of the lease payments.

This will give the customer an opportunity to use the product, generate revenue and incur no expense. This offer will probably be less expensive than the traditional discount you are already giving, therefore you will actually generate more revenue and profit.

When you offer a financed approach you make it easier for the prospect to say yes while increasing the profit opportunities for your company.

Price selling will allow you to make attractive offers to your prospects and customers that identify price in terms they can afford and understand. You can use performance marketing to attract prospects without fear of “sticker shock.”

Financing is a unique value that meets the criteria for success and has been in your hip pocket all along. All you have to do is to turn it into a sales tool. You can do this by recognizing the opportunity to use lease-based price marketing to:

  • Build a competitive edge
  • Create demand
  • Build the sale
  • Compete on price

You and your competitors sell commodity products. As we have been discussing it is difficult to create a reason for your prospects to buy from you. You can use price selling to build a competitive edge. All of your competitors are offering products for a price – for a lump sum price. Why not begin to quote your price in terms of dollars per month?

As soon as you propose a financed purchase, you will immediately differentiate yourself from competition. You will probably find it easier to get your prospect to fill out a credit application than it is to close a sale.

Leasing, or monthly selling costs, make it easier to create desire for your product. Think about how you make decisions: you relate acquisition costs to your cash flow. This approach is even more important if your prospects are small businesses.

And you can usually relate benefits that your product provides directly to monthly savings… whether the savings are displaceable, avoidable, or from increased revenue. Savings and revenue increases are more easily understood in terms of monthly savings and the costs associated with generating these opportunities are more easily explained in the same terms.

Lease-based price marketing can also help you create demand for your products by expanding the prospect base who may be able to purchase your products. Consider this: no matter how much you discount your product, if the customer does not have the cash or a line of credit available to purchase, it is impossible for them to make a buying decision.

You can expand your selling opportunities by showing prospects how they use financing tools like leasing to acquire your products even when they do not have the funds immediately available. A discount may create additional interest, but an easy way to acquire your product with limited cash will create orders.

Using price selling you can sell the complete configuration, or an advanced model with all of the nice to have features, by quoting the price in terms the prospect can afford. You can include service, support, and software in the total transaction and still be price competitive. And by building the total sale into an affordable monthly payment, the customer will get everything they need. You will create higher margin. It is a true win-win situation.

Even when you sell based on a monthly lease price, customers who want to purchase outright can still buy your product. But by promoting and selling using a financed price, you will position yourself closer to the way the prospect thinks.

You will be there first. And you will have better credibility because you understand how their business operates which will produce a closer working relationship between you and the customer.

Your competitors are working on being the cheapest place to buy. You should work on being the easiest place to buy!

Price marketing can be used to set your commodity product apart from your competition while increasing your profits. Easy buying terms are always in demand from your customers, and it will cost you little or nothing to implement. Terms can be altered to react to the changing needs of the marketplace or the changing needs of a particular customer. The key is to make the approach easy to understand and implement.

Getting Your B2B Salespeople Involved in Price Marketing

I have described lease-based price marketing as a solution for creating a value add without risk. The real key to the success of this approach is selling your salespeople on selling. This approach works equally as well across a broad spectrum of businesses and industries, including exceptionally large Fortune 500 corporations and small independently owned operations.

The first obstacle to the success of price-based marketing is convincing the salesperson that this approach is different. They may not perceive price-based marketing as being different than their current approach to selling.

Many salespeople believe that their current approach to selling is just as effective and unique. Therefore it is extremely important that your sales force understand my earlier discussion about the marketplace. You have to gain their agreement that what is being used today to differentiate and establish a competitive advantage is not getting the job done at the highest possible profit margin.

Many salespeople will argue that they do not need to understand this type of selling. If you do not get them to agree that they have to generate higher margins and improve their competitive advantage, you will hear a lot of complaints like: “why bother?” or “Nobody else is doing it this way!”

If you get this kind of feedback after setting the stage, then you have to work harder on selling them on the importance of being unique and generating as much profit as possible. It is important that they agree that there must be a better way to compete than by simply giving away all of the profit in the transaction.

Now that you have their attention and involvement, find out what your sales force thinks are their customer’s buying criteria. You will probably be surprised by this conversation. Having conducted several of such training sessions, I have learned to sit back and let the salespeople fight until they have tired themselves out.

I was initially shocked to see experienced salespeople, selling the same product to the same types of customers, violently disagree about the true decision criteria in their B2B marketplace.

I now believe, after several years of observation and analysis, that salespeople identify the customers buying criteria based on the areas:

  1. They are most comfortable dealing with, or
  2. That won or lost a sale for them the last time they were in a competitive situation.

Once you are able to establish agreement on the buying criteria, ask the salespeople to rank them in order of importance. You will probably have to lead the group to complete the list of criteria.

Work with the group on ranking the list of criteria first on its importance to the customer and then on their ability to impact the customer’s perception and reaction to each criteria.

In every situation I have observed the salespeople identify very little ability to influence price. During all discussions about price, you should stress the requirement that the item sold must produce enough profit to justify making the sale.

With the criteria listed and ranked, you can now begin to have fruitful conversations about how you can sell around the various criteria.

Price is always ranked high by the salespeople and low in their ability to impact, so you will have the perfect environment to introduce price marketing. You can expect a great deal of skepticism, per­ haps similar to your reaction when this idea was first introduced.

However, once the salespeople begin to evaluate the opportunity and results this approach can yield, they will be more receptive to learning more. If you relate how they make their own buying decisions using their home and car as practical examples, they will become strong believers.

You can get the salespeople fully involved by using practical examples to prove your point. The best way to demonstrate the value of price marketing is to create live examples using situations you recently lost. Work with the group on how much better you could have presented the price if you had used a lease and packaged offering.

Your leasing company or broker can help you prepare for this training session by creating the examples prior to the meeting. Many leasing company representatives and brokers prefer to provide just the rate and documentation. You should demand more. Most of these people are professionals and can help you create unique and innovative value added offerings.

If you are not getting this kind of service, ask your leasing representative or broker to assist you. If the performance is not satisfactory, get another representative, even if you have to change companies.
Remember, a leasing company or broker is selling a commodity product – money – and it is up to them to make it unique for you. They have to sell value add too.

Several things you should remember in dealing with a leasing company or broker:

  • Once you decide to use a leasing company, they should become your partner. You both should be fully committed to one another. Work with them on developing unique solutions for your customers. Loyalty can buy a lot of flexibility on the part of the leasing company.
  • No company wants to spend its creativity on you only to have you go elsewhere to get a lower rate. Most financial transactions are not rate sensitive because most rates are about the same. Exceptions to this occur in a very large lease or if a very large company is requesting the lease. Creativity can overcome small rate differences.
  • Leases can be configured differently. Creative ways of packaging the offer include adjusting the down payment, term (number of months), buy out rules, or periodic payment vacations to account for the seasonality of your customers business. These configuration differences can be extremely important for you to be responsive to the needs of your customer. They can make you unique and add value to the transaction. Your leasing company or broker plays an active and key role in making price marketing a value add.

If your leasing company cannot or will not work with you on creating an individualized package that allows you to be unique, change companies. The leasing representative or broker that only drops off the rates and documentation is of no use to you. You must work with someone who can blend their background of price marketing with your product, sales team, and customers to create the proper offer that will make a difference for you.

Helping Your Salespeople Use the Price Marketing Method

Implementing this approach will take hard work. As I mentioned earlier, success is directly related to your ability to sell your salespeople on selling. The salespeople have to believe in and sell using price marketing.

Too many salespeople are comfortable calling on the same people and competing in the same way. Price marketing decisions may not be able to be made at the current contact level. Your salespeople will have to learn how to find and sell the appropriate person within the company.

Most of the time the current contact can introduce you to the appropriate person. This can help the person look good inside the company and help you meet another contact within the company.

This sounds so easy, but many salespeople are not comfortable going within a company to talk about a subject they are not really comfortable with. You can take some of the pressure off by developing marketing support materials that also tell the price marketing story specific to your product(s). Again, the leasing company can help you create these materials.

Tracking the salespeople can help you complement success and correct weaknesses. Create a B2B prospect tracking form. Include on it a section on price marketing containing questions like:

  1. What is the monthly cost of the purchase?
  2. What is the monthly financial benefit, agreed to by the prospect, of buying the product?
  3. Using only agreed upon dollars, tell me why the prospect should buy the product.
  4. What is the competitions cost per month?
  5. What financial terms are important to the customer?

You will continue to search for other ways to be unique and add value.

Virtually anything you do will add expense and ultimately be copied by your competitors. Price marketing can address what is perceived as the most crucial decision criteria by salespeople while adding profit margin.

Convincing your sales force that price selling is different and adds value is difficult. Training your salespeople to be comfortable can be painful. Implementing and managing price marketing will add work in managing the outside financial provider. But no other effort can produce as much differentiation and uniqueness that can be implemented relatively quickly without radically changing your company and products.


  1. Companies are being continually challenged on how to become known and unique in their markets. Most cannot afford to develop totally unique products and are often selling commodities that are offered by other companies. The challenge is to create the perception of being known and unique in the mind of the prospect.
  2. Even products that are initially unique and different only enjoy a brief period with a competitive advantage. Many companies will quickly create clones of the original product and then sell them at a fraction of the cost. Therefore, most products quickly become commodities with the only differentiation being price.
  3. Companies combat this commodity syndrome by attempting to add additional ingredients to the product package. Unfortunately, any value add that is worthwhile, is quickly copied by competition. Price again becomes the differentiation.
  4. Price and terms are the two factors most susceptible to sales influence in impacting the customer’s buying decision.
  5. When you offer a financed approach, you make it easier for the prospect to say yes while increasing the profit opportunities for your company.
  6. Price marketing will allow you to make attractive offers to your prospects and customers that identify price in terms they can afford and understand.
  7. Your competitors are working on being the cheapest place to buy. You should work on being the easiest place to buy!
  8. The first obstacle to the success of price-based marketing is convincing the salesperson that this approach is different. They may not perceive price-based marketing as being different than their current approach to selling.
  9. Price marketing can address what is perceived as the most crucial decision criteria by salespeople, while adding profit margin.

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The expert's thoughts on direct response - growth hacking - performance-based marketing activities - DIRECT MARKETING

About Me, Rafal Lipnicki.

the direct / performance marketing consultant with a strange sounding name


Not your usual "guru" but a real-world performance marketing & innovation consultant based in Europe and an experienced senior executive at leading multinational companies.

What and Where.

I am a consultant for hire, working remotely and on-site all over the world (but Europe is always preferred). See my consulting services page for details.


Contrarian advice most of the time. Document-based audits, workshops, one-off projects, mentoring programs, and more.