Knowing your competitors pricing may seem like the holy grail of competitive intelligence. But, for manufacturers it is often a panacea. We find that most competitors aren’t pricing their products any better than you are. In fact, their prices often vary throughout the year as sales goals are chased.
End of a quarter and behind on sales goals? That’s when price discounts are prevalent. Large accounts getting low prices? Don’t bet on this price being offered to medium and smaller accounts.
A Better Approach
A better approach is to create a value map that utilizes market research to identify the perceived value of competitive offerings from the perspective of the customer.
Customers are surveyed to rate benefits of a product offering versus the price paid. The outcome is displayed on a value map making it easy to see how your product benefits and pricing compare to competitors through the eyes of the customer. After all, only the customer’s perception really matters.
We are frequently asked about the value of competitor pricing. It is certainly useful for true commodity products like oil and gas where little, if any, differentiation exists. Most products differ enough to warrant different price points. Nearly everything you do to create, market and deliver products differentiates you from the competition. Even individual sales people each bring their own personality and relationship to the business.
Buyers, on the other hand, try to convice sellers that all products are the same and can be bought elsewhere for less. Don’t fall into this trap. Be sure your sales team can articulate your value and differentiate your products from competitor offerings. Value selling training can help sales teams communicate value more effectively.