Murphy's Law: Price Wars Never Win and Winners Never Wage Price Wars
Murphy's Law: Price Wars Never Win and Winners Never Wage Price Wars
An article in the May 2010 Harvard Business Review by Marco Bertini and Lee Wathieu discusses how to stop customers from fixating on price. They should have written for our lab profession. How can we use pricing structures to clarify our advantages in the marketplace? Most of the time, clients are caught shopping laboratories by price. They assume (incorrectly of course) that a crown is a crown is a crown. Nonsense. We need to call attention to the value of your products and services - ideally focusing on something that differentiates you from the competition.
Goodyear Tire and Rubber face this dilemma years ago. Customers were unwilling to pay premium for the innovations that led to extended tread life and safety. Because of the sticker shock these improvements caused, buyers gravitated to the lowest price. They did not understand the differentiating factors. So, Goodyear began pricing their tires based on how long the tires would last rather than on the complexity of their engineering. They had 20,000, 40,000 and 60,000 mile tires all priced appropriately. This highlighted the advantages for customers and taught them a new way to shop for tires and compare products and services.
How could we do that? Should we sell three year, five year and lifetime crowns? How about two powder, five powder and 10 or more powder builds? You tell me the answer. Send me an e-mail and let’s brainstorm together.
Our clients already understand the price differentiation that alloy content creates. This would not be such a large step.
