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Are you losing business because of price? It isn’t your buyers fault - read this!

Are you losing a lot of business because of price? This article might help.

Did you know that only 12.5% of lubricant buyers are significantly influenced by competitor offers or actions? This striking data point challenges the common belief that competition is the primary reason for lost sales.”

In the world of B2B sales, it’s easy to fall into the trap of obsessing over what our competitors are doing. We often assume that our failures in closing deals are due to better offers or strategies from our rivals. This belief leads us to hide our secrets and true value, complicate our messages, and focus more on outdoing competitors on price rather than understanding and addressing our customers’ needs.

What does the data suggest?

However, data from the Plan Grow Do Buyer Revolution research suggests a different story. With only 12.5% of respondents indicating that competitor actions significantly influence their decisions, it becomes clear that our focus should not be on the competition. Instead, we need to enhance our unique value propositions and strengths. Yet, our current behaviour often contradicts this insight, leading to missed opportunities and a misguided focus on price negotiations.

What if we’re creating this?

If we continue to assume we only lose on price, are we not ignoring the fact that we make it hard for our buyers to buy from us by not offering what they need to inform their own decisions? When buyers lack the information they need, the only place they can naturally go is to price. So, whose responsibility is it to ensure that our value propositions are clear, compelling, and customer-focused?

The Myth of Competition-Driven Losses

In B2B sales, a widespread belief persists that the primary reason for losing business is due to competitors offering better deals or having superior strategies. Sales teams often operate under the assumption that their competitors are constantly ahead, leading to a focus on monitoring competitor actions rather than improving their own value propositions. This belief drives behaviours such as concealing key information, overly complicating product messages, and emphasising price negotiations. The fear of losing to competitors can overshadow the need to understand and address the specific needs and concerns of customers.

Contrary to this belief, data from the Plan Grow Do Buyer Revolution reveals a different story. According to the research findings, only 12.5% of respondents indicated that competitor offers or actions significantly influence their purchasing decisions. This statistic is eye-opening and challenges the common assumption that competitors are the primary factor in lost sales.

Unpacking the data

What does this data suggest about the true impact of competition on buying decisions? Firstly, it indicates that while competitors are a factor, they are not as influential as commonly believed. The majority of buying decisions are influenced by factors other than competitor actions. This underscores the importance of focusing on the unique value that your company brings to the table. Instead of obsessing over competitors, businesses should prioritise understanding their customers’ needs, providing clear and compelling value propositions, and building strong relationships based on trust and reliability.

Furthermore, the data suggests that many sales losses attributed to competitors may actually be due to internal shortcomings. When businesses fail to effectively communicate their value propositions, customers are left with little choice but to compare on price. This scenario often leads to the misconception that the loss was due to a competitor’s better offer. In reality, it highlights the need for a shift in focus from competition to value.

By addressing the root causes of lost sales—such as unclear messaging, insufficient customer engagement, and lack of value differentiation—businesses can improve their sales outcomes. Embracing a customer-centric approach and investing in value-driven strategies will not only reduce the perceived impact of competition but also enhance overall customer satisfaction and loyalty.

The Real Reason for Lost Business

Lack of Value Proposition: One of the primary reasons businesses lose out on sales is the lack of a clear and compelling value proposition. When companies fail to articulate what makes their products or services unique and valuable, customers struggle to see beyond the price tag. In the absence of a well-defined value proposition, the decision-making process for buyers often defaults to price comparisons. This puts businesses in a precarious position where they must compete primarily on cost, which can lead to a race to the bottom and diminished profitability. A robust value proposition, on the other hand, helps differentiate a company in the marketplace, making it easier for customers to justify a purchase based on benefits rather than just price.

Communication Gaps: The tendency to hide key information or make it difficult for customers to understand the value of a product can significantly backfire. When companies withhold critical details, potential buyers are left without the necessary information to make informed decisions. This creates a trust deficit and forces customers to rely on the one metric they can easily compare: price. Additionally, overly complicated messaging can confuse customers, further detracting from the perceived value. Clear, transparent communication is crucial in helping customers see the full picture of what they are purchasing, thereby fostering trust and confidence in the brand.

Customer-Centric Approach: Focusing on the customer’s needs and problems, rather than on the competition, is paramount. A customer-centric approach involves deeply understanding the challenges and pain points that your customers face and tailoring your offerings to address those specific issues. By prioritising the customer’s perspective, businesses can create solutions that are not only relevant but also highly valued. This approach shifts the conversation from price to value, as customers are more likely to appreciate and invest in products that meet their specific needs effectively. Moreover, a customer-centric mindset builds stronger relationships and loyalty, as customers feel heard and valued.

Read more around this topic with our article Any insights yet?

In conclusion, the real reason for lost business often lies within rather than with external competitors. By focusing on developing clear value propositions, closing communication gaps, and adopting a customer-centric approach, businesses can create a more compelling case for their products and services. This shift not only helps in retaining customers but also in fostering long-term growth and success.

Shifting the Focus to Value

Understanding Customer Needs: Understanding and addressing customer needs is the cornerstone of a successful sales strategy. When businesses take the time to listen to their customers, they gain valuable insights into their pain points, challenges, and goals. This deep understanding enables sales teams to tailor their conversations and solutions to meet specific customer requirements. Meaningful conversations stem from showing genuine interest in solving customer problems rather than pushing products. By asking the right questions and actively listening, businesses can uncover the underlying issues their customers face and offer targeted solutions that resonate on a deeper level. This approach builds trust and fosters long-term relationships, making it easier for customers to see the true value in what is being offered.

Building Strong Value Propositions: Developing strong value propositions involves clearly defining what sets your product or service apart and why it is the best solution for your customer’s needs. A compelling value proposition should be concise, specific, and customer focused. It should highlight the unique benefits and outcomes that customers can expect, addressing their primary pain points and demonstrating how your offering delivers superior value. Strategies for building strong value propositions include:

  • Conducting thorough market research to understand customer needs and preferences.
  • Identifying and articulating the unique features and benefits of your product or service.
  • Using customer testimonials and case studies to provide evidence of value.
  • Continuously refining your value proposition based on customer feedback and market trends.

 

By effectively communicating these value propositions, businesses can create a strong narrative that differentiates them from competitors and appeals directly to their target audience.

Differentiation Through Value: Highlighting unique strengths and value is a more effective differentiation strategy than focusing solely on competitors. When businesses emphasise their distinctive features and the unique value they provide, they create a compelling reason for customers to choose them over others. This approach shifts the focus from comparative metrics, such as price, to qualitative benefits that are harder for competitors to replicate. For example, a company might differentiate itself through exceptional customer service, innovative technology, or a proven track record of success. By showcasing these unique aspects, businesses can create a powerful identity that resonates with customers and stands out in the market.

In summary, shifting the focus to value requires a deep understanding of customer needs, the development of strong value propositions, and an emphasis on unique strengths. By adopting these strategies, businesses can move beyond price-based competition and build stronger, more meaningful connections with their customers, ultimately driving better sales outcomes and long-term success.

Practical Steps to Implement Change

Internal Mindset Shift: To successfully shift from a competition-focused approach to a customer-focused one, businesses must first undergo an internal mindset change. This involves redefining success metrics from outperforming competitors to satisfying customer needs and creating value. Leadership plays a crucial role in driving this change by emphasising the importance of understanding and addressing customer challenges in all strategic discussions. Encouraging a culture where every team member, from sales to product development, prioritises customer-centric thinking is essential. Regularly communicating success stories that highlight customer satisfaction and value creation can help reinforce this new mindset.

Read more here about what really is a sales mindset?

Training and Development: Implementing a value-driven approach requires equipping sales teams with the right skills and knowledge. Here are some practical training programs and resources to consider:

  • Customer Insights Workshops: These workshops can help sales teams learn techniques for gathering and analysing customer data to better understand their needs and preferences.
  • Consultative Selling Training: Encourage a consultative selling approach were salespeople act as advisors, focusing on solving customer problems rather than just selling products.
  • Access to Resources: Provide access to tools and resources such as customer personas, case studies, and value proposition templates to support sales efforts.

 

Continuous Improvement: Adopting a value-driven approach is not a one-time effort but an ongoing process. Here are steps to ensure continuous improvement:

  • Customer Feedback Loops: Establish mechanisms for regularly collecting and analysing customer feedback. Use this feedback to refine and enhance your value propositions and offerings.
  • Market Research: Continuously monitor market trends and competitors to stay informed about changes that could impact your customers’ needs and preferences.
  • Iterative Development: Adopt an iterative approach to developing and refining value propositions. Regularly test and adjust your messaging based on customer responses and feedback.
  • Performance Metrics: Track performance metrics that reflect customer satisfaction and value creation, such as customer retention rates, net promoter scores, and customer lifetime value.
  • Cross-Functional Collaboration: Foster collaboration between different departments, such as sales, marketing, and product development, to ensure a unified and consistent approach to delivering value to customers.

Conclusion

In the competitive landscape of B2B sales, it’s easy to fall into the trap of constantly worrying about what competitors are doing. However, data shows that focusing excessively on competition can obscure the real reason for lost business: a failure to clearly communicate value to customers. By shifting our focus from competitors to understanding and addressing customer needs, we can create stronger value propositions and foster more meaningful customer relationships.

The myth that we lose business primarily because of competitors is debunked by the fact that only 12.5% of buyers are significantly influenced by competitor offers. The real challenge lies in providing clear, compelling value propositions and addressing the unique needs of our customers. It’s time to move away from price-driven negotiations and towards value-driven conversations.

To achieve this, we must undergo an internal mindset shift, prioritise training and development, and commit to continuous improvement. By understanding our customers better, we can develop solutions that meet their needs and stand out in the market, regardless of what our competitors are doing.

Let’s commit to better understanding our customers—their challenges, needs, and goals!

By focusing on delivering exceptional value and addressing their specific problems, we can differentiate ourselves in meaningful ways. It’s not about outdoing our competitors; it’s about out serving our customers. Start today by engaging in deeper conversations with your customers, gathering feedback, and continuously refining your value propositions to ensure they resonate with the people who matter most. By doing so, we can transform our approach to B2B sales and create lasting success.

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