Rising above the 'discount everything' syndrome

"Is there a way out of commodity-market quicksand, where companies get so caught up in cost-cutting?" That's a question on many minds these days, and it was addressed in a recent column on BtoBonline.com by Kay Plantes, co-author of "Beyond Price: Differentiate Your Company in Ways That Really Matter." Plantes sums up the problem very well in her column:

The Internet demolished barriers to entry and made price comparisons and auctions relatively easy. A rapidly growing and strong business services sector helps companies copy competitors' offerings. Finally, disruptive innovation -- finding a lower-cost way of performing a specific job -- has become the flavor-of-the-day strategy. Excess capacity makes matters even worse.

She offers a list of ways that business-to-business marketers can combat the discounting trend:

• Offer something that gets customers excited. Can you increase your customers' revenue? Lower their costs? These are the benefits that matter, not your quality or features, she writes.
• Communicate the value promise first and individual products second.
• Don't forget to communicate with your own employees. They must understand the value promise so they can help deliver it.
• Make sure your marketing department is part of the team that sets your strategy.

Mary Scheibel, principal owner at Milwaukee-based marketing communications firm Scheibel Halaska Inc., noticed Plantes' column and posted a blog item on the subject, which helps drive the point home to manufacturing companies. The recession has made it difficult for midmarket manufacturers "to avoid getting sucked into self-destructive pricing wars," Scheibel writes. "But our clients have been fighting back. They've taken a close look at what they do that customers value the most, and they're actively adjusting their business models accordingly, by zeroing in on a niche or approaching customers with more robust offers. Companies need to put less less emphasis on products and prices, and greater emphasis on the unique value your organization provides to customers, she said. The fact is that manufacturers run into this problem all the time -- not just during recessions. The most successful firms stay ahead of the game through a variety of means -- innovating, upgrading and improving efficiency. But this recession has reinforced the idea that everything should be discounted. Maybe we'll know the recession is really over when that mindset starts to fade away.