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You Have to be Good to Earn That Price

Being the best will get you the best prices, but you have to be better than everyone else.

You have to be better than everyone to win the business and keep it. If you are good, very good, you can be good enough to get past the price issue. If your products and your services are better than everyone else’s, you can get by the price issue. And if your treatment of your customers is so special that they feel they cannot live without you, you can get by the price issue.

Now, I’m not claiming that it is going to be easy, nor am I saying that it will happen every time. But I can tell you that if you are the best in class, you will more often than not get your price.

You ask, “But how can we be better than everyone else? What will that take, and in the end, is it worth it?” Good questions. I can start off by saying yes, it is worth it.

Let me ask you, is it worth it keeping your customers for life? Is it worth it making a profit? Is running the best performing company in the industry worthwhile? You see, to have your customers pay you a better price than they pay your rivals, you must be so good that you are performing at the top of your game. You are delivering all of your products on time and you are as close to zero defects as possible.

The road to great customer service is also the road to being a great company; the two ideas go hand in hand. And, if you can do everything better than everyone else, you will become a great company.

To be a great company, you must be valuable to your customers. In fact, you must be so valuable that when the customer’s nasty bean counter (wearing a green visor and sleeve garters) complains that the company is spending 5-10% more with you than they pay your competitors, the customer’s staff will tell him to shut up! Your fans (yes, they will be fans) will be so in love with your products that they will point out all of the benefits they get from using your products, benefits so far superior to the products they get from your competitors that they refuse to live without your products and services.

Look, in the real world this is not going to happen in every case. There are still the cheapo customers out there who only care about price. You know who they are; they know the price of everything and the value of nothing. They claim they are building the best products in the world by building them with the very cheapest parts that money can buy. You are never going to change their minds, so why even try?

Focus instead on the customers who understand quality, who know what a good product is and appreciate great service. Most importantly, focus on the companies who appreciate all of the little extras you do for them: help with engineering, flexible delivery dates, manufacturability advice, the ship-to-stock and just-in-time delivery services you provide, the special way you package the boards, the immaculate documentation you include with the products, and the constant availability of your management team.

Only deal with customer who appreciate the way you drop everything to help solve their problems (even if those problems come from your competitors’ cheap products), the way you look out for them and act as their personal experts and consultants, and the way you put their interests first, making sure that you provide them everything they need to be successful. Those customers are the ones you invest in. They are the ones you target, win, service, and then keep for life.

And you know what? These are the companies who will make you better, the customers who appreciate what you do to the point where they are willing to pay you well for what you do. These are the companies who succeed in business because they treat their suppliers like they want to be treated, and most importantly, they are making the best products on their market today by using the best parts money can buy from the best vendors.

And that’s because they are buying from you, the best supplier on the market today. It’s only common sense.