Friday, September 30, 2011

People who come to you for PRICE will leave u for PRICE

Yes. Obvious & TRUE.

Price is the ONLY differentiation your company ofter to the customers?  Think Twice about your business strategy. Today cut throat competition forces many businesses to merely compete on price. However this strategy may get u immediate business but will not take you long way in business. 

Thin margin to get business is riskier than  more margin but less business. Mere volume is without adequate profitability is company on steroids. High on workout and low on proteins. As with high workout muscles break down in our body & without adequate protein it cant be built , similarly with high turnover without adequate margin , business breaks down. Yes unsustainable activities without capability to invest for future sustainable activities like research and innovation or talent attraction and retention.

Secondly most critical are the differential factors that will decide the business volume other than price. What value you can design within your product. We buy branded products by paying premium. What differentiation brand offers ?? Comfort and confidence that product is of reasonable quality, customer service would be good if not outstanding, complaint would be handled professionally and with care, reasonable exchange policy and service centers.   

Therefore when Price  has become a major deciding factor, offering a WOW !!!! factors in your product and service design is very critical to become & remain competitive. Compete on WOW factors, there is not many players there.  Brands like Apple , Virgin , Starbucks, Amazon   { In India unfortunately service excellence and WOW factors are missing from product and service design ( pl share brands which matches best in the world brands in customer experience & service excellence ) } rare yet or hence sustainable. Customer will stay with these brands irrespective of price of their offerings. 

Next time when you get the deal merely on the basis of price, its an ALARM, think inward and check your business strategy and product and service design.  It requires IMMEDIATE attention { & action too} .


  1. Yes brand means customer experience brand creates.

  2. Marco Monfils ,Marketing, branding & strategy advisor ,Hungary

    Commodity marketing can be very profitable business for sure, but that is not to be confused with brand marketing.

    Just because a commodity has a brand (name), logo, slogan and some nice imagery does not a brand make

  3. Roy P.
    Design Build Project Management Projects Seeking Funding,Las Cruces, New Mexico Area

    When clients realize service with best price comes with a price, many choose to leave.

  4. Please understand that TRADEMARKS ARE NOT BRANDS; BRANDS are not TRUSTMARKS. Buying on price, as the only factor, leads to low switching costs, with little or no downside to the consumer.

  5. Yes brand means customer experience brand creates & Of course not logo, stationery, color or trademarks etc etc. Customer Experience is d ultimate brand. Ppl spend too much time and efforts on so stationery design and logo and much less time on customer experience.

  6. Posted on Linkedin : by Vineet A.
    General Manager (Marketing) at Sogo Fashions Pvt. Ltd.Noida Area, India

    How True & this applies not only to products or services, but, employees too.

  7. Posted on Linkedin by Raja Sen


  8. Posted on Linkedin by: Avani N. ,Asst Manager Delivery (APAC) at QEDbaton Private Ltd,Pune Area, India

    Absolutely right...premium things with value differentiator have a premium cost to it...People who buy them are perfect examples for brand loyalty. So price should subsume the package deal.

  9. Building an image is relatively easy in our country these days, what with the availability of such tools on social media and relevant, expert service providers. But the image has to translate into a brand only by endorsements from the customer, based on his experience. That's where the product or service design with the stated Wow factor will come into play. A unified approach from all quarters of the company will have to be put in. Communication, leadership and commitment of the organization will come to the fore.

  10. Posted on Linkedin: ANI RAY,
    CEO at Steiner India Ltd,Mumbai Area, India

    Yes, its right and nothing wrong in that. If you see any thing has a Value (Price) whether explicitly stated or implicitly considered in human brain. And any human action is considering the value proposition of the activities.

  11. Posted on Linkedin: Abe WalkingBear S.,Founding Member at PCCG Colorado Springs, Colorado Area

    Smart business people know that it's NOT about price, it's about The Total Cost of Doing Business and that's what determines whether or not they jump ship.

    Price is but a variable expense and part of The Total Cost of Doing Business

  12. Posted on Linkedin: Alexey K. Director

    liked the phrase! that's exactly what happens in financial or consulting services: client who seek only price wil not stay long with you. the clients must stay for value and quality, low price will not drive the business anywhere.

  13. Posted on Linkedin: Marco Monfils,Marketing, branding & strategy advisor,Hungary

    maybe you mean, brand means customer experience ahead of the rest:-) otherwise its just the same old commodity in new packaging, marketing included

  14. Posted on Linkedin: Tom G.,President & CEO at Nexas Networks Inc.Toronto, Canada Area

    Although this is true in principle, I wonder sometime about certain companies and their myopic culture of immediate value and "looking good".

    How many purchasers search the web for the "best deals" are seemingly oblivious to the total cost of ownership? How much are the soft side of the business equation worth - like free tech support, great customer service, expert sales people or liberal return policies? I have seen customers tow the corporate line and get 4 quotes for everything because it plain "looks good" to management. I know as a supplier, we make a calculation about the future worth of a cheap, hard-to-please customer and sometimes refuse to play ball. Lowest price comes at a cost in the value chain - and so I ask if the short term buyers are prepared to pay more in the long run?

    Forcing vendors to get LEAN and avoid waste is their systems is a good thing - but like a loss leader, someone pays the bill in the end - the vendor, the buyer, the laid off employees, the environment, the divorced families, the creditors in a bankrupt business???

    We appear to live in a cutthroat world these days, but I suspect that every vendor has had a low ball request. I have even had people not tell the truth in these negotiations, as the ends justifies the means to some purchasers.

    At our high tech company (Nexas Networks), we focus on the "internal reality" of great products and expert support. The "external reality" of projecting our business to the world is the tough part - so we rely on word of mouth, articles, speeches, and participation in standards bodies to show leadership. We call this approach "positioning in the market place"...

    Sales is not about maximizing how much we can charge a customer and get away with (as some unethical sales people support), it is about long term relationships.

    Businesses don't do business with businesses - people do business with people!

  15. Tom thanx for d great insight.

    I specially like this " Forcing vendors to get LEAN and avoid waste is their systems is a good thing - but like a loss leader, someone pays the bill in the end - the vendor, the buyer, the laid off employees, the environment, the divorced families, the creditors in a bankrupt business???"

    There is something fundamentally wrong in the way we manage our business and society.

    U may like the following 2 posts also:

  16. Postedon Linkedin: Federico F. ,Systems Engineer at F. Fondeur & Associates,Miami/Fort Lauderdale Area

    As a System integrator I know exactly what you are saying. We have a saying If you want loyalty, get a dog. We can't blame the clients, budgets are tight. But sometimes inexpensive is everything else but.

  17. Well yes. Its every entrepreneurs call whether to sell commodity or experience!!!

  18. Postedon Linkedin by Sauraabh Aggrawaal, Seasoned Brand & Marketing Professional,Branding & Marketing at CNEB News
    New Delhi Area, India

    Well, that's a universal truth and what's tough is to how you are able to retain those people. Sauraabh Aggrawaal

    Seasoned Brand & Marketing Professional

    New Delhi Area, India
    Marketing and Advertising

  19. This comment has been removed by a blog administrator.