For all of us who are selling value more than price, it is always discouraging to hear: “Look, it’s just too expensive for me …” before you even get started with the conversation. And we’re often selling products and services that are highly technical, customizable, innovative … the very kinds of products that the naive might consider immune to price pressure. So that’s why this little story about a zipper manufacturer in Slate magazine caught my eye.
Apparently YKK, a Japanese zipper manufacturer has become the de facto standard, specified by fashion designers across the world. The reason? … YKK zippers are known for their dependability. They don’t break. So even though there are hundreds of competitors, many priced lower, many reputable fashion designers don’t want to take the chance that a 32-cent zipper might pop open and spoil the brand experience for a $200 pair of pants. A couple of quotes from the article:
“YKK, for decades now, has established itself as old reliable.”
“A zipper will never make a garment,” says [clothing designer, Trina] Turk. “But it can break a garment.”
“The last thing we want to do is go with a competitor to save eight or nine cents per zipper and then have those zippers pop …”
Now perhaps the folks at YKK didn’t intentionally set out to create a value position. Perhaps they just had the discipline to stick to their high quality standards, their efforts to reduce costs and their resistance to discounting … for decades. But it does demonstrate yet again that even products that might seem to be commodities can be differentiated and avoid the pressure for price-matching. The key is that their customers believe that there is a difference … and that the difference matters.
We can see from this article some of the steps that are required to accomplish this:
- First, you must have a real competitive advantage, something that matters to your customer and actually reduces their costs or reduces their risk or improves their ability to sell products.
- Second, you need to be able to tell the story of why and how your advantage helps people.
- Third, your customers must see the value.
Now for most of us, customers don’t already see the value, so our sales people must have some proof, some documentation that proves the advantage in actual practice. That means we have to do a study that will generate proof. Lots of manufacturers have the first and second points under control. But very few dare to attempt the third. So they are left with talking about a theoretical advantage or a potential advantage, and unable to say, “We’ve tested this and it works … and our clients will tell you it works … 7 times out of 10.”
If you want learn to sell a value proposition more convincingly and avoid the discounting trap, then here are some things you can do. First, you can join us for an upcoming Defending Price workshop. Second, you can learn more about this important topic from the excellent book and article linked below. Third, begin to ask your team, “What proof do we have that our products deliver incremental value to our customers? How could we get more proof?” And as always, don’t hesitate to call if you’d like to ask questions …
- The Value Merchants, a book by J. Anderson, N. Kumar, J. Narus, Harvard Business School Press, 2007.
- Customer Value Propositions in Business Markets, an article by J. Anderson, J.Narus, W. van Rossum, Harvard Business Review, March 2006