Compete on Differentiators, not on Price or Quality

Christopher Witt —  June 21, 2013 — 1 Comment

If, like me, you’re in the business of providing a service – if you’re a consultant, coach, trainer, speaker, or facilitator — there are really only three basic ways you can stand out from the competition.

You can compete on price, quality, or differentiation.

Competing on price – “I’m cheaper than the competition” – is a losing proposition.

Prospective customers / clients have always been concerned about price. In the past year or so it seems that they’ve become overly fixated on finding the lowest price. So you have to reevaluate your rates and your fee structure to stay competitive.

But underbidding the competition cuts into your profits. If you set your fees low enough and do it often enough, you may win the work but lose your financial viability.

There will always be a competitor who is willing, out of inexperience or sheer desperation, to go lower.

And consistently underbidding the competition undercuts the value of what you do, both in your own estimation and, eventually, in the eyes of your prospects.

Competing on price alone is, at best, a stopgap measure, never a good long-term strategy.

(Price and value are, of course, different matters, and I promise to address the problems of competing on value in a later post.)

balance scaleCompeting on quality – “I’m better than the competition” – is hard to prove.

I’ll admit, this is the strategy I’ve relied on for most of my career. I’ve studied and worked hard to develop my knowledge, skills, and capabilities. And, without any hint of humility, I think I’m damn good at what I do.

But here’s the problem. How do I, how do you, how does anyone convince others that what we provide is better than what our competitors provide?

Let’s say you have an impressive client list, glowing testimonials, impressive case studies, and references who will sing your praises to the high heavens. You’re well educated. You have certifications, accreditations, and citations. Maybe you’ve even published articles and books. Your competitors – if they’re in the marketplace these days – have the same.

I’m not saying that everyone is the same or that you’re no better than the others. (I like to think I’m better than my competitors. I hope you feel the same way about yourself.)

I’m just questioning how you prove to prospects the superior quality of what you do.

There are ways to do it, of course. (See 59 Ways to Grow Business Credibility and Experience for examples.)

Competing on quality is worth doing, but it’s hard work because proving superior quality of something as insubstantial as a service is so very hard to do.

Competing on differentiation – “I’m different from the competition” – is more promising.

Let’s say you and I are competing to provide a two-day training program on public speaking. Our fees are more or less in the same range. Our qualifications (experience, references, etc.) seem – in the eyes of the prospect – to be more or less equal. What’s going to set us apart is either what we provide (the content of the program, the schedule, agenda, handouts, etc.) or how we provide it (the process we use to create the program or the way we deliver it).

A differentiator has two main components: 1) it’s different, and 2) it provides a benefit the prospect wants.

  1. A differentiator is anything that you are, have, do, or use that is different from what others are, have, do, or use.
    Think in terms of subject matter expertise, proprietary knowledge, systems or processes, assessments, management approaches, tools, technologies, or facilities.
  2. A differentiator gives the prospect something they want: a benefit.
    It helps them achieve, fix, solve, avoid, or improve something.

If the services you provide or the ways you provide them are indistinguishable from what everyone else does, you reduce yourself to a commodity. And then prospects will make their selection, for the most part, on price. And you don’t want to let them go there. Do you?

Photo courtesy of winnifred xoxo at flickr.com

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Christopher Witt

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Chris Witt was born in Los Angeles, California. He currently lives in San Diego. He works as a speech and presentations consultant, an executive speech coach, and an orals coach.

Trackbacks and Pingbacks:

  1. Differentiators / Discriminiators Contribute to a Winning Proposal - Christopher Witt - April 28, 2014

    […] I’ve written before about the benefits of selling a proposal by emphasizing what makes you and your approach different. (See Compete on Differentiators, not on Price or Quality.) […]

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