How Can You Compete Without Discounting Your Price?

How Can You Compete Without Discounting Your Price?

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“As a business, you are always measured against your peers,” explains Nicholas Bell, Decision Inc’s CEO. “If you’re seen as a tech provider, then you’re measured by what your competitors are saying. It doesn’t matter what you actually do, and what your real differentiators are, what matters is what clients think you do. Once that happens, they’re benchmarking your price point without understanding the value you offer. This was our problem. The market’s understanding of the service we delivered was what constrained us.”

Decision Inc is an Information Management (IM) firm that offers six disciplines that work hand-in-hand in the information continuum:

  1. BI,
  2. strategy (how to use your information to support strategy),
  3. data management,
  4. enterprise performance management,
  5. content management; and
  6. advanced analytics.

Related: Nicholas Bell On The Art Of 10x Growth

Moving away from commoditising your business

“We have a very customer-centric focus. We’re not commoditised, and we can’t compete on price. Our service differentiator is unique. We just needed to find a way to make the market see that.”

Bell had to go back to the drawing board. You can’t articulate who you are if you don’t fully understand it yourself.

“We’re not a typical tech provider, because we don’t just sell products. We’re also not consultants like McKinsey, Deloitte and Accenture. Those organisations are expected to charge high prices for their IP and human capital. As a tech company, we’re expected to charge commoditised prices. The reality is that we sit in the middle. We have products and IP that we bring to the table. How could we show this value to our clients and distance ourselves from our perceived competitors?

“We have the strategic ability to bring tech and people together in such a way that we can analyse your business, service your entire decision-making needs through one vendor, and then implement any tech decisions that are made.

Proving your value

“But this still wasn’t enough. So we looked to our track record. We’ve done 500 projects in 2016, we have a 90% customer satisfaction rate, and 250 clients are billed annually. The referrals speak for themselves.

Related: Governance = Value Creation + Massive Business Growth

“This helped, but it still wasn’t enough. Ultimately what we needed to do was be able to prove the value we bring to an organisation’s bottom line. When we go in to a client, we need to be able to say ‘We can save you R50 million, and charge you R500 000 to do it.’ More importantly, we need to quantifiably prove it.

“From that moment on we were charging on capability and not on an hourly rate. Today that’s the conversation we’re having with clients. We’re not having conversations around price and hourly rates.

“The ability to have this conversation has made a huge difference in how we engage with clients, and ultimately on our bottom line and growth trajectory.”

Nadine Todd
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.