To win in a competitive marketplace, you must be clearly positioned as one of three things: the cheapest option, the best option or the only option. There is no other option.
And for any seller, a genuine belief in the strength of that positioning is absolutely essential to get the confidence they need to hold out for the most profitable deal. So what is your positioning?
The Cheapest option is the default position for any seller who is not confident in the strength of what they’re selling. To be a true “price leader”, the whole organisation, from sourcing to supply chain, from operations to marketing, needs to be engineered for absolute efficiency and constantly innovating ways to reduce costs. If that doesn’t sound like your business, then “Cheapest” is not a sustainable option for you.
The Only option is a very powerful place from which to negotiate, but one which can easily be overestimated: are there really no substitutes for what you offer? It’s also a position that can quickly be lost as competitors follow the leader. Gillette had a couple of years as the only triple-blade. Apple had just a couple of months with their iPad. So ensure you fully leverage your uniqueness, but plan for the fact that, in most cases, the majority of a product’s life is not actually spent as “the Only”, but as trying to remain “the Best”.
The Best option is judged by the customer, pure and simple. Each type of customer makes their own assessment based on what is most important to them. Their biggest considerations are generally quality, service, convenience and simplicity. A successful business must be good at all of them, but exceptional in the one that their customers most value, and are prepared to pay most for.
Being cheapest or unique makes profitable selling easier, but both are difficult positions to sustain in a competitive market. To be the best option for your customers, it’s essential that you understand what is most important for that customer, and evolve your pitch and your offer to fit. Getting that understanding is the topic of next week’s e-shot.
BOTTOM LINE: To have the resolve hold out for the most profitable deal, you must know that your brand is the buyer’s best option. That can only come from understanding their priorities and their alternatives.