The “Lowest Price” is a Business Model not a Sales Tactic

My friend Anthony Iannarino wrote a great post on his blog about competing on price yesterday. Check it out, it’s worth the read.

Competing on price is a constant issue in sales. Competing on price is the default position of the lazy, the scared, the talentless, or the desperate. If you are deduced to price, you’re in trouble.

Pricing is a business model, it’s not a sales tactic. Yes, you can wiggle a little on price. It’s to be expected, but competing on price has no place in sales –unless it’s your business model.

Price as a business model is a good choice, if you can execute. The biggest company in the world competes on price and they are not apologetic about it. The entire Walmart culture and its processes are built to deliver on a low price business model.  Everything they do supports that business model.

Not every one has a low price business model. This is why so many companies lose deals and fail when it comes to price. The company doesn’t have a lowest price business model, yet they are trying to compete as if they do. Competing on the lowest price is like any other business benefit. You would never try to compete on service if your company wasn’t set up to deliver the best possible service. You’d never try to compete on durability, if your company hadn’t been built to deliver the most durable products in the industry. You wouldn’t try to compete on speed, if your company wasn’t designed to be the fastes provider.  We know competing in areas that aren’t our strong suit is wrong in every other areas except price. So,why then do we constantly compete on price when we know “price” is not what we do best.

The lowest price is a business model.  If it’s not your business model, don’t compete in the price game.  You’ll lose.  But, I’m sure you know that already.

Now go read Anthony’s post, it’s a good one.