Values Hierarchy, Part 3

How do you deal with a person whose primary concern (value) is price?  While the answer is certainly situational, one possible answer is to probe deeper into the purpose of having the lowest cost or price.  In a recent presentation, this question came up in relation to a wholesaler dealing with a retailer whose primary concern is price.

For most of us, price is frequently a concern.  However, the absolute lowest cost is not always desirable.  The lowest cost parachute, for example, is probably not much of a selling point.  It is true that some things are essentially commodities and price is the primary selling point.  However, in many situations, price isn’t the only concern.  This is where values elicitation comes in.  While a competitive price may be a qualifier (the quality that gets you in the game), it is typically other qualities that get the win.

For the wholesaler mentioned above, the retailer probably wants the lowest price to attract the most customers and to maximize their profit margin.  However, the lowest cost product may actually cost the retailer business if their products don’t function properly.  This may boost profits in the short-term, but in the long-term, having repeat customers is much more sustainable and profitable.

If providing low-cost products and services is the business strategy, then that’s fine but there always has to be a balance between quality and cost.  Where you fall on that continuum depends on your strategy, the market, and how you utilize the 4 P’s of Marketing: Product, Place, Price, and Promotion.

In the end, if someone tells you that price is their most important concern, don’t worry if you’re not the low-cost provider; simply elicit their values by asking what else is important.  By identifying these other components, you take the conversation away from price and exand the conversation to a larger field of opportunity.

Best of luck!