Preventing price pressure
As one of the two objectives in B2B marketing, the task of preventing price pressure has a lot to do with communication.
In terms of the Five Factors of Value, Price is ranked as the least influential of the five B2B buying motivators. It’s also the component of Value with the most straightforward definitions: Competitive, Rational and Structured.
So why all the fuss, so often, over Price?
Very often, this exclusive focus occurs when customers see nothing beyond Price and Price alone – when they aren’t seeing any contribution from the other four Factors. This doesn’t necessarily mean that contributions are not being made in terms of Response, Service, Time and Quality. More likely, these contributions aren’t being highlighted and accurately demonstrated.
They won’t pay for what they can’t see.
B2B products and services are typically a complex mix – many pieces go to make up the jigsaw. Often they are surprisingly complex and each piece of the jigsaw should be making a demonstrable contribution to customers’ continued success.
Even the most seemingly straightforward products and services can turn out to be much more involved than they appear at first glance. But all too often, this is where things stop: at first glance.
Roadblocks and deadlocks
By only allowing customers to see a partial reflection of the entire jigsaw, it’s entirely reasonable that they only expect to pay a partial amount of the asking price.
This creates a roadblock for sales and margins and is what often sours and then deadlocks negotiations – options become limited to losing the sale or cutting the price. Hopeless.
Of course there are other ways to handle this like doing the deal and then under-delivering – the Trap-and-Torture method. And it certainly helps to know that this is what less scrupulous competitors might do.
Breaking the communications barrier
B2B marketers need to position their products and services in such a way that the whole jigsaw can be clearly seen and fully appreciated. An earlier post on brands deals with this in more detail, but in summary, it’s vital that all elements of the market see the relevance – to them – of your products and services.
To achieve this, marketers first need to be confident that they have a detailed understanding of the outcomes that are being produced for the market.
The second task is to ensure that outcomes are being convincingly broadcast to the right people via the communications ‘portfolio’: 1-1, PR, events, advertising, direct, digital and collateral.
If Price still remains the customers’ sole focus, then marketers need to analyse why the outcomes produced by their products and services are not considered Competitive, Rational and Structured.
More on Value and buying motivators:
What is Value? - the five buying motivators in B2B
The role of Value in B2B marketing - the influence of ‘Value’ on B2B buying
Leveraging B2B’s buying motivators - developing marketing communications for bottom line results
Back to The Long Hello: making B2B marketing work for the bottom line
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