June 12, 2015 June 12, 2015 / Josh Dragon, P.E.
I have the incredible opportunity to manage a technical product line for my company. From a sales perspective, technical products are kind of cheating. They make it very easy to sell based on value. That’s because the technicality of the product can become the value proposition. Which is great for me, because I love to educate my customers on why my product will be so valuable to them.
Premium products get to demand premium pricing. If you can clearly articulate and deliver a high quality product, you can generate a large profit.
High profit allows for more money to be reinvested back into research and development efforts.
High profit means you get to pay your great employees great wages.
High margins mean you don’t have to scrape for cost savings in your operations. You get to look for operational cost savings, but you don’t have to in order to survive.
The focus is on quality, not quantity. My team and I build custom applications for our customers. Because our customers expect quality and are willing to pay for it, we have the resources to make each application the right way.
The best people want to work on the best products. That means you won’t have to spend your time and money on recruiting. The talent will come to you. Plus, you get to be a part of the very best team. This raises the bar for the entire team.
Customers seeking value want you to understand and solve their problems. They won’t put you in a cage match with your competition to drive your price down by 1.0%.
These kinds of customers value the relationship they form with you almost as much as your product or service.
Once you have established trust with these kinds of customers, they will become extremely loyal to your companies brand.
Products sold on value are not in a, “race to the bottom.” Commodity products can only differentiate based on price. So managers look for every way to pull cost (and price) out of the product. Selling on value means you don’t have to cut prices.