Think of a portfolio company you’re concerned about.
Or a company you advise, consult with or manage.
I’m sure they tell you daily that profits are in a vise across their industry, because everyone competes on price.
Here’s a list of 15 reasons that competition might be so tight – and margins so thin – across their industry. In which case, it would only take one company, looking at one or two of these things differently, to move from competing on price to naming their price.
If a company is competing on price:
- It hasn’t established itself as an authority in its market.
- It isn’t really sure who (else) it should be selling to.
- It knows who it should be selling to but hasn’t started a conversation with those folks.
- It’s afraid to invest in building relationships with category leaders in its target audience.
- If it’s a turnaround, it’s afraid people still remember the service issues it had when it was in trouble a few years back. And doesn’t have a plan for moving forward.
- It knows it can’t market credibly market in its current niches until it does something about customer service. But it has no idea where to start.
- It thinks the people they need to be talking to really don’t need their services anyway – despite years’ worth of case studies that show how they’ve helped clients do really remarkable things for their businesses and, in turn, their clients.
- It doesn’t track its sales productivity.
- It thinks that as long as sales are growing, the rate of growth isn’t important.
- It’s sure it can make up margin on volume.
- It doesn’t think the way it packages itself is important.
- It still thinks answering RFPs is a good way to get business.
- It “doesn’t believe in that sleazy marketing stuff.”
- It “doesn’t have time for that frilly marketing stuff.”
- It hasn’t priced anything in so long, it doesn’t realize basic materials that look decent are practically free.
- Management remembers the last time they tried to pull together some materials – and still has nightmares over how the office handled the process.