Often times we will hear from business owners that have a very hard time coming up with a value proposition. They treat their product or service like a commodity and, as a result, they end up focusing only on price.  We spoke with Author and Business Expert John Cerasani on this matter.  Here are some highlights from the interview.

John: When figuring out your differentiator, please be more creative than price.   Believe me, this will kick you in the rear-end at some point; and if you get a client on lower prices, you will lose the client to lower prices in the future.  That is what I call SALES 101, my friends.  Having said that, if you have a creative way to ogbtain a deliverable for a client at a lower rate-through negotiating, bargaining, or what not-the that is okay.  If you are just out there cutting fees to win business, you won't have a business for very long.

I had a situation during my fourth year in business where I was going after a high profile client.   A very large competitor was also going after the same client, and we were the two finalists to earn the business.  When the competitor found out that it was my company on the other side of this, they just automatically assumed I had to have been undercutting their pricing.  So what did they do? They went and lowered theirs.   They didn't realize I had a unique value proposition, they just knew that my company was relatively newer and so much smaller than their 100 year old plus, 20,000 employee plus organization.   So now they changed the conversation with the client to being about price versus value. It was all about value up until that point.

The client called me in for a meeting and asked me if I would match their new pricing.  I agreed.  But then guess what?  They met with the competitor and the competitor decided to drop their fees even further.  The client then called me in and asked if I would match it again.  

I told the client to keep having these meetings and pretty soon it would be free.  I then politely declined.  The competitor got the business because of my reluctance to do this.   They also lost the business two years later to another copetitor of ours that did what?   Came in cheaper than them.   

You do not make money on clients like this.

John Cerasani is the Author of Paid Training and 2000 Percent Raise, visit 2000PercentRaise.com for more information