“Better a diamond with a flaw than a pebble without.”
― Confucius
About ten years ago in my past life – as CEO of a medical equipment company which I have since sold – we were exhibiting at a trade show. An attendee walked by, checking out our booth. As I started to introduce myself, he exclaimed with a scowl, “Our business goes to the lowest priced vendor! Price is everything!”
If his goal was to set the tone for our interaction, he succeeded. I’m rarely at a loss for words, but I had never encountered anyone so obviously hell-bent on turning his organization into the home of crazy-low prices. The one positive outcome of my blissfully brief meeting with him was the eventual inspiration for this article.
If I had detected even a hint of willingness to enter into a dialogue, I might have asked him how we had allowed things to reach a point where “price is everything.” I also may have challenged him to put himself in my place. What if his customer proclaimed, “Price is everything!” I’ll bet he would have immediately come to the defense of his company – and rightfully so. With the tables turned, his focus would be not on price, but on value – which is where it belongs.
Each company is a value chain. It’s made up of people, facilities, materials, services and suppliers. Like any chain, it’s only as strong as its weakest link. I submit to you that being focused on “cheapest” is asking for lots of weak links.
I doubt that anyone prefers to be driven solely by price. We’re all interested in getting the best value, whether it’s our money or our employer’s. I also recognize the tremendous cost pressure businesses have experienced these past few years. But I’d like to believe that, given the choice, even bean-counters would embrace value over price. (By the way, I use “bean-counter” as a term of endearment.)
Think of your own experiences, either at work or in your personal life. Did you ever buy something at what appeared to be a good price and later regret it? Such a simplistic analogy may not do the discussion justice, but you can bet everyone can relate to it, because we’ve all been there.
It’s tough to resist the temptation to meet the other guy’s price. It takes guts to go out into the marketplace with a higher price. It also takes hard work. Anyone can sell if they’re the cheapest. Getting your customers to realize your added value takes effort.
If business owners and managers have the courage of their convictions and confidence in their people, products, and services, they can move from a price focus to a focus on value. We all owe it to ourselves, our employees and our customers.
Bill Collier is the St. Louis area coach for The Great Game of Business. He works with business owners who want an informed, accountable team so they can grow sales and profits. Bill can be reached at 314-221-8558, GreatGame.com/stl, ggobstl.com or billcollier@greatgame.com.