Points of Difference – A lesson from Big Business
Normally when I write on lessons from big business, it’s to give small business owners some strategies developed by people with much more money and resources that could benefit those who aren’t similarly advantaged. However, in this case, I have an example you don’t want to copy.
Recently I changed energy providers. I was cold called by a competitor to my current supplier. Normally, I don’t respond to such calls, but I had just paid my quarterly bill, and was thinking about how expensive it was. Perhaps the competitor knew my billing cycle, which was a clever move if so, or else they just call all the time, knowing at some point they would get me at the right time. Also smart. Persistence. Particularly when they knew they had a better offer.
Long story short, they showed how I could reduce my costs by 20%. Wasn’t a very hard sell. I had been lazy and not checked out the competition for a long time, and my current company was happy to take the profit.
After I made the change, I received a begging letter from my old supplier asking me to think again.
“The truth is we’d love you to stay”
Of course they would. They were raking it in at my expense. So next I looked in their letter, for a reason why I should stay. Did they offer to match or beat the price? No. Did they emphasise their superb (ha) customer service? No. Did they offer some other reason? Well… yes. Sort of. They referred me to their website where they had some energy saving savings ideas, you know, fluorescent light bulbs, and turning off the power when you don’t need it. Gee thanks. Also, I could buy some other stuff from their retail stores. Thanks again. All designed to provide me some savings, things I could still do, if I hadn’t already done so, with their competitor.
So I suspect they knew they couldn’t (or wouldn’t) compete on price. The thing is, they had no points of difference. They are one of the biggest suppliers in the state, so are probably relying on customer inertia combined with higher margins, and so probably won’t do anything until there is a significant erosion of their customer base. And then it will be too late.
If you want to be the high price supplier, you need to have clear points of difference otherwise people will choose on price.
What points of difference are you using to defend your prices?
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
Learn more about how these marketing strategies would work in your business when you request a Free Preview copy of the best selling Small Business book; The Five Pillars of Guaranteed Business Success
Or find out how to directly apply and implement these strategies into your business and achieve your goals by requesting a Complimentary Business Evaluation now.