Feeling the Pulse of Your Customers to Avoid a Price War

Whether you sell a pure commodity product (like white rice), or a unique item (like a new technology addressing an untapped market), knowing what matters to your customers - and how that changes over time - is critical to projecting your brand in the most effective way to fend off competing on price.

Nobody wins in a race to the bottom.

If you want to charge more than the lowest available prices, you need to stand out. You need to justify why your customers should pay more. If your product's features save them time, or enable them to do more than they could previously, great. That differentiation is important and helps set your product apart from the competition.

But what if your competitors are able to duplicate that feature to eliminate the gap, and you no longer have viable product differentiation? Sure, you hope to continue to innovate and stay ahead, but how will you compete if they innovate faster? Or decide to lower their own prices to a point where you simply cannot compete on price anymore? At that point, without a clear differentiation, you are on the wrong side of the value equation.

Regardless of industry, one factor that can materially affect a brand's success is customer service. Some brands are famous for it, such as Nordstrom, which have amazing return policies and provide appointments for one on one consultants for customers looking to purchase specific items. But they are also famous for being expensive. Customers knowingly pay more - sometimes a LOT more - for a better user experience. Is the experience a brand provides really justification for charging significantly more? In many cases, the answer is a resounding yes.

Leverage your front-line resources.

Especially if you are not directly interacting with customers all day, every day, understand that your sales and support personnel hold much untapped knowledge that can materially improve your brand's products and services. And ignoring that knowledge is directly counter to the brand's sustainability and profitability needs.

Action: Sit down with those who are on your front lines (take them to lunch) and ask them what they are hearing. Get a pulse on your customers from those who engage with them the most. Here are some ideas to uncover areas for improvement:

• What questions are you asked over and over again? If you can address common questions earlier in the branding and marketing process, or create additional content for your sales team or website, you might just streamline the online conversion experience to improve your time to close, as well as lower your cost per acquisition. A few goldmine answers might be:

• "How long does it take to onboard?" Clarify and present the post-sale process in a straightforward way to eliminate confusion or apprehension about a confusing or lengthy set of steps.

• "What if I am not happy with the product?" If you have a satisfaction guarantee, it's not front and center enough. If you don't, consider adding one. One of the biggest apprehension points for any purchase is FOGSIP - Fear of Getting Stuck with an Inferior Product. Remove the fear and your conversion rate will increase.

• "What if I have questions after purchase?" Your customer service team should be a point of pride. Highlight how happy other clients have been after using your CS team. You ARE capturing feedback and asking consent to use it, right?

• What complaints are your hearing? Perhaps messaging is getting lost somewhere, or the latest promotion is falling flat. Complaints are one of the most valuable sources of insight, but are often ignored or suppressed from those who need to hear them most. If you can get feedback from the deals that you DIDN'T win, those may be the most valuable, as they have no feelings of commitment to softening their commentary due to the ongoing relationship. A few goldmine answers might be:

• "I can't afford $XXX dollars per month/year." This goes straight to the value position. Obviously this is different for every product in every industry, but if you can shift the conversation from the cost to what the benefits are - especially if there are savings or efficiencies involved - you are in much better shape.

• "It felt like you were trying to sell me a solution to a different problem than I have." Honesty can hurt, but it's critical to hear. How confident are you that every person on your sales team is listening to prospects and customizing their pitch (or product mix, if applicable) to their specific situation? How many deals are you losing because of a disconnect? If you're an online seller, does each product description sufficiently address the problems they solve, or do they force users to reach that conclusion on their own?

• "I kept getting sent to different people." This is common in organizations with separate bizdev and sales functions. If the handoff is clumsy, the buyer experience can be less than pleasant. Be sure to streamline any new introductions so they are incorporated seamlessly, and not make the buyer feel like little more than an impending commission source.

• "Your product doesn't do what I need it to do." It's possible it does solve the problem, but it's not clear how. Or, maybe there truly is missing functionality. Or maybe it's buried within the product when it should be more front and center. Knowing the complaints helps you to fix them.

• "I never heard back." This is detrimental to brand equity, yet remains commonplace. What systems do you have in place to ensure every inquire is addressed quickly? Whether it's an email, an online form, a chat bot, or a social post, prospects and customers expect to hear from you (and quickly) when they reach out. Ensure no communications fall through the cracks.

• What is inhibiting prospects from pulling the trigger on a purchase right then and there? If you can identify the speedbumps along the way to conversion, you are that much closer to addressing them. Note: "price" is not a sufficient answer. A few goldmine answers might be:

• "They just don't seem to feel the urgency." Take a good hard look at your value proposition. Does your product solve a need, or is it really more of a nice to have? If it does address a tangible problem, focus on that. If it's truly discretionary, test different messaging to see what might click more effectively.

• "Competitors are promising XYZ" How are your front line staff equipped to handle direct competitor comparisons? If your value is unmatched in the marketplace, that could be a sign your competitors are gunning for you, and it's useful to know what tactics they are using to erode your lead. You can match those tactics to negate their advantage, or figure out a different way to offset any threat. If you are in a flatter industry or product tier, you may have to get more creative. Bundling complementary products for a slight discount, or upgrading them to a higher service level, or providing bonus points in a recurring purchase business, are all viable options for gaining or maintaining market share without simply lowering prices.

• What alternatives are prospects mentioning? Are you competing more with an equally functional and priced product, or are you more in competition with "doing nothing" or a free alternative (e.g. Google Docs vs. Office)? If competing with an equally functional product, how does your pricing compare with theirs? If a more expensive product is winning deals over yours, what is driving them to the competition? Often, critical competitive intel is discovered by customer service staff, but not relayed effectively back to other decision makers, and valuable time is lost in addressing issues. You have to know who your true competition is to message effectively, and less obvious alternatives often represent a surprisingly large share of the buyer's options. For example, premium bluetooth headsets don't just compete with wired headsets. They also compete against budget (off-brand) bluetooth headsets. And don't forget users can still function with no headset at all. Messaging must be on point against all three alternatives.

Spend the time to really dive into any surprising answers. After a few conversations, you will likely start to notice patterns. There may be one or two primary objections that keep coming up, or a common misconception about pricing or functionality.

Those are all deficiencies that can be addressed on the site, or incorporated directly into sales scripting or objection handling guidance, and help position the brand more effectively about its value. In the end, both the business and the customer win when the focus is on the product and experience, as opposed to just having the lowest price.

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