By Cliff Findlay
For years the economy has worked on the concept of debt, with very little real money actually there to pay for the services. This will never again be the case. Banks and businesses are now being challenged to work in the real world where people only spend what they have. This may seem like a new concept to many but it is one they will need to get used to quickly. If companies are only going to use (or are being forced to use) the money that they have, then they are going to want to know why they should use you. They'll want you to explain your benefits, how you can make an impact on their business and why your calculated risk is one they need to take.
The issue for businesses is that during the last decade when there was money available (albeit debt) they didn’t really need to stand out or be different. They just needed to exist and business would eventually come to them. There was enough to go around. In today's environment however, people think before they buy and are asking where the value for money is within the transaction. A simple way to explain this is people going into retail shops to find the item they wish to buy and then going home and buying it cheaper online. Of course the shop can’t compete on price. They have wages, rent, business rates, electricity etc. to pay. But of course the shopper doesn’t care about that; they simply want the best deal. If it is cheaper, then it is less of a risk.
This means that businesses that have no real differential are now being crunched on price. Why? Because if they have nothing different to say they are just the same as any other company offering the same service. Therefore they are a commodity like any other and price becomes the only way a customer can compare and in the end there is always someone else who will do it cheaper.
The ONLY way out of this downward price spiral is to tell the market WHY you are so different, to create a REAL Unique Selling Point (Unique being the key word) and to explain to clients that if they want a quality product or service they'll obviously have to pay extra.
If companies don’t do this - and do it quickly - then they are, in my opinion, a dead man walking as there is simply too much competition and not enough business to go around. They will either need to strip their process and services down and work from a price-based business model where they are the cheapest or they will have to clearly explain to the buyer why they aren’t.
Professional, nice, helpful, on budget, on time, DON’T count by the way. Those values are expected. Let’s face it how many businesses would you work with who weren’t professional, nice, helpful and did the job on time and for the price quoted?
The business world has changed, maybe forever. Therefore all the old models are dead and a new structure must be created.
It will take time and effort to impact your business and implement these changes but bear in mind that history tells us that following a recession or depression the strong survive and the weak fall by the wayside.
The only question you need to ask is; which one will you be?
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