Very recently I witnessed a large company make a conscious decision to chase revenue instead of relevance. This company had proven year after year that they could generated ever increasing amounts of money by delivering (and charging for) the results that come from executing unique ideas that led their clients to prosper.
- They had a record-breaking year for revenue
- They were market leaders in an arena populated by larger competitors with more resources than their own
- They had a great manager who had developed a talented and committed team that believed in the direction they were headed
But when the time came to develop a budget and strategize for the new year, the leaders lost confidence in their ability to amplify their efforts over the previous year. They believed they’d hit a revenue wall on the profits they could make based on their misperception of the product they sell. Instead of increasing the value they provided to their clients and increasing the rates they deserved for providing these results (as they’d certainly earned the privilege to do), they ran the other way and decided to turn their valuable services into a buy-it-by-the-pound commodity.
Which way are you running?
Will you run boldly toward being the first in your market to provide innovative and effective services for your clients? Will you race to create what my friend Anthony Iannarino calls Level Four Value Creation?
This is the level where we become a strategic partner, a trusted advisor. We help our clients envision their future. They rely on us to help them to make decisions that move them into that future. They think of us as part of the value creation chain that produces and delivers the value for their customers. We own the outcomes in regards to what we sell and what we provide our clients.
Anthony Iannarino – TheSalesBlog.com
The alternative is a race to the bottom
The race to the bottom consists of delivering a commodity product at a commodity price.
The lowest spot rate, cheapest ad space, least expensive cost per impression.
You’ve left nothing to differentiate yourself from the competition other than price. Your only value becomes saving them money, and as soon as the next guy comes up with a way to deliver the same quality (or even lower quality!) for a dollar less than you, you’re going to have to decide whether you’ll match the price to keep the business.
The lowest price has zero to do with delivering results.
Charging cheapest rate for something isn’t a promise to deliver a qualified lead or to be accountable for results or to watch your client’s back and make them look brilliant for choosing you. When you’re racing to the bottom it’s just a promise to come in under a budget that has nothing to do with delivering a positive result that benefits the client’s business.
It’s simply a promise to send the cheapest invoice.