Selling on Value Always Wins!

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A member of my Vistage group shared this example with me and the group concerning the importance of trying to sell on value whenever possible.


Company A was selling submersible pumps to be used in production processes, such as paper manufacturing. For years it dominated its industry. A new entrant offered a comparable product at $25,000. Company A’s sales people found they were losing orders to the new company, and put great pressure on management to reduce their product’s price to $25,000 in order to compete.


Recognizing that this could set in motion a potential destructive price war, senior management began assessing the actual value of each product. They discovered that:

  • On average, their pump lasted twice as long between maintenance shutdowns as their competitor’s unit
  • Their competitor’s pump had many more shutdowns, costing its customers about $50,000 in lost income.


Armed with this information, Company A changed its marketing strategy to focus on its superior value. Soon, their pump not only regained its lost market share, but actually increased it! And of course, profits rose even faster. The lesson: significantly higher value can trump cost savings.


Are you looking closely enough at your products’ value and how it compares that of competitors? Are you maximizing the marketing advantage you have? Share your experiences with us!