As we look at probable future challenges in professional selling, I feel comfortable with the following predictions: competition in the marketplace will continue to get keener; decision makers are becoming smarter and more discriminating; margin pressure will continue to be an issue. As we go forward it will be necessary for us to carefully and strategically sort out our options as to how we go to market and how we address the issues of discounting. Taking our creative selling efforts to new levels and maintaining our position as viable and profitable organizations will be of paramount importance.

I am often asked if I would rather be selling a product of the highest quality at an upper level price or selling a product of marginal quality at a much lower price. I'll take the former over the latter every time. People are more willing to pay for excellence than they have ever been. They just are not willing to endure the hassle that goes along with the compromise in quality or service. It is easier to explain price once than to apologize for quality forever. In our attempts to assess the mindset of these buyers, we find that people in practically every industry want problem-free products and services that do the job for them without requiring additional time and money to solve associated problems. You are usually dealing with sophisticated buyers who know the significant cost of downtime.

Recently, one of my clients in the furniture business was telling me about one of his best salespeople, Will Shulte, who called on the national headquarters of a rental company to present their office seating line. He wanted to become the primary supplier for the company's rental business.

Will already knew that his seating was priced at least 20 percent higher than the product the rental company was carrying. His approach was to build his presentation around the quality and performance of his product in order to justify the additional investment.

At his first meeting with the company, Will realized that this sale was not going to be easy. Price, as anticipated, continued to be the primary objection. But even after several unsuccessful calls on the buyer, Will persisted in looking for the right hot button. Finally, he found a way to let facts and figures do the selling for him.

Will did an analysis based on the rental company's records of replacement costs, repair costs, and life of the chairs they were using (his competitor's product). He compared these figures with similar records on his chairs used in specific large industrial installations.

When this analysis was laid out in front of the decision-makers, Will Shulte made his sale. He showed the rental company that, even though they were paying less for his competitor's chairs initially, they were really paying more in the long run! With his products, they would pay less in returns and repairs and enjoy a longer rental life. And the real icing on the cake came later for Will's customer, when the resale of Will's chairs after several years of rental turned out to be higher than the company had experienced before.

Within a short time, Will turned that company into one of the largest purchasers of his company's seating products in the United States. And he did it with a simple yet very effective technique: he creatively illustrated to them the unique factors of product (quality) differentiation and showed them what the real value was.

We can all learn something from Will Shulte. Price is not a singular, obvious number; price can be very complex.

There is price as it appears on the surface, and there is actual cost. What is your product's true cost after considering every aspect of savings and benefit? How about your competition's?

Remember, anyone can cut prices, but it's a risky strategy at best. Price cutting is a far more expensive exercise than most people realize. For example, if your company is offering a product for $1,000 which has a 40% ($400) gross profit in it, and if a salesperson gives the customer a 10% ($100) discount, that represents a 25% decrease in profit. A little bit of discounting goes a long way. So go forth and talk value with great conviction!

One alternative to discounting in this scenario would be to add value by explaining product superiority or unique benefits that would accrue to the buyer when he selects this product. Another alternative would be to include a premium item that increases his perception of overall value, but costs you or your company less than a discount would. This way, you have sacrificed very little of your gross profit.

All salespeople should understand margins, the impact of price-cutting, and the creative alternatives that can protect your sacred margins. Without "margin protection," the future viability of your enterprise is questionable!

We should know that there are six types of differentiation sales people should be keenly aware of: product differentiation, price differentiation, service differentiation, process differentiation, relationship differentiation, and technological differentiation.

Let’s take a look at each:

  • Product Differentiation is important, whether tangible or intangible. When you have a product that others can’t offer that has substantive desirability and features, no competitor can underbid you!

  • Price Differentiation is for those who consciously choose to go to market as the “price leader”, or those who are simply unable to come up with other genuine differentiators. Discounting compromises your margin and ultimately, your profitability. So go there last, if you must go at all.

  • Service Differentiation is among the most powerful today because people will do almost anything to avoid hassle and inconvenience. Get in your customers’ faces and serve them to death! Don’t give away your margin. . . give away your heart through extraordinary service and simple caring and you will be valued and remembered.

  • Process Differentiation can offer its own uniqueness. How can you make your process of doing business more appealing to your customer? Perhaps it is invoicing them the special way they want, or shipping in a manner that meets their needs and budget, though it is out of the norm for your industry. Be willing and able to turn on a dime for your customer to gain this advantage.

  • Relationship Differentiation is simply being a more desirable person to do business with than your competitors. We should never underestimate the power of extraordinary people skills and friendly, high integrity behavior. If two people really want to do business together, the details probably won’t get in the way. If either one doesn’t want to do business with the other, the details probably won’t make it happen!

  • Technological Differentiation can be a great high tech contribution to your offering. It is anything that you or your firm can offer that includes technological capabilities and advancements that your customers desire. Think out of the box with your associates, ask customers what they want and need, and come up with some advanced, non-traditional high tech approaches. If you do this better than your competitors, you will have a comfortable advantage.


The weaker we are at offering differentiated value components, the more we must rely on price. If you have no differentiators, you are essentially offering a commodity in which case price is everything. Try not to go there. In this arena, you are only as smart as your dumbest competitor!

Let's do everything in our power to creatively differentiate in any manner other than discounting. Get in your customer’s faces and serve them to death. Make sure that everybody in the decision loop knows that none of your competitors compare to you in the terms of the creativity and uniqueness you bring to the table, along with your quality products.

Don't give away your margin; give away your heart. Give your heart away through extraordinary service and simple caring. Your heart will only get bigger when you give it away. Give away your margin, and you will be mortgaging your future.

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