Discount vs. Differentiation

Good morning, Guerrillas!

One of my first clients was in an ultra-competitive market...really, imagine the World Series/Super Bowl/Lower Oakland Roller Derby all rolled in to one.

This firm was and continues to be world-class as a performer...as does their competitor. Each tiny bit of market share is hard won and guarded fiercely with politely bared fangs...

Even after an on-site visit, I could only make small suggestions to this firm, as they were already doing most of what I would have suggested them to do. They were already on their A-game...as was their competitor. They do have an edge that the competitor doesn't. They seek the counsel of almost every expert in the field that they can find.

Is this an inexpensive process? No. Does it pay dividends? It most certainly would have to or they wouldn't still do it. They are CONSTANTLY stretching, reaching and growing their arsenal on every front. They don't bring a knife to a gunfight. It keeps them from trying to compete on lower levels of the playing field, such as the time-honored tradition of discounting one's services to win a price shopper.

One of my earliest mentors in the business would snarl and gnash his teeth every time he would hear of our firm getting into a bidding war with another firm.

"What are we? Hookers? Car Salesmen?" He would growl, grumble and fume.

You see, we could honestly say that we did a superior job to our main competitor. But our management was absolutely petrified to stand up and say that to a price-shopper. Not even the old "remember-you get what you pay for" chestnut.

Don't discount yourself. Differentiate your firm. Make your customer experience superior, superlative and sublime. Fulfill needs that they don't even know they have. It isn't always in grand sweeping gestures. Disney doesn't create ONE BIG EVENT for you to experience to make you want to come back. They know that loyal raving fans are made when you string a bunch a small moments together that are made magical with just a little effort.

And Disney does not compete on price...you know that and I know that. They dominate by providing an unparalleled experience.

You too can dominate your market in the same way. Do all the things your competitor isn't able or willing to do. *WARNING* It means being extra perceptive and working your ass off. But it pays dividends in the end.

Hardcore price shoppers are usually not worth your time. They want every thing in the world and don't want to pay for it. Even if you make their experience breathtakingly memorable, some of them will still run to the guy down the street next time to save $100 bucks. In fact, I'm sure there are even a few of them that cannot believe that they can't find someone to pay THEM for the privilege of cremating their mama...

The new economy is creating a new breed of these shoppers. Some of these can be won by merely explaining how you are better and why the price variance is justified. But it can't be all talk. You got to prove to them that you were worth it. Do it! DANGER!!! If you really aren't worth the price difference, they'll sniff you out in a second and complain to a hundred people about how you lied and cheated just to get their money...

For many, price is merely an objection. Find out what is behind that objection and you can successfully negotiate around it. Maybe they had a bad experience with a competitor (a firm they may have used for generations) and are looking for an excuse to make a switch. Most people don't know how to go about making a move like this (especially with death imminent) so they fall back on price alone.

Don't be afraid to to use this line (or your own variation thereof) "I don't want you to make a mistake or choose the wrong funeral provider based just on price when there are so many other factors to consider as well (insert your reasoning here).

Plant the seed of doubt...but gently. Most have never given thought to the possibility that choosing the lowest cost provider might just be a grave mistake. (I'll groan for you.)

Handle these dealings delicately. Fight for the RIGHT price-shoppers, but learn to cut loose the ones who aren't worth your time and energy.

When you create the right experience for them, the next time their need rolls around, price should be much less of an issue for them.

As always, I toast your success and remain,

Dan Heaman, CFSP

PS - Down below look for a bit of advice for dealing with the bottom feeders of your marketplace competition...The Chicago Way: courtesy of Mr. Connery!