Rate Integrity or Greed?

My employer has an unpopular business model.  It includes asking for and getting automatic annual escalators in rate. As you may imagine, it earns us more enemies than friends, on the surface.

However, sales success depends upon the ability to deliver value. If you aren’t able to help a customer solve a problem, you won’t keep that customer for long.

Delivering value requires a relationship of trust and exchange of information. You must be able to extract the right insights from a customer in order to impart effective solutions to them.

I help my customers make money. If I didn’t, they wouldn’t remain my customers. While most of them actually do like me, that’s not the reason they buy me. They buy me because my services give them solutions to important business needs of theirs.

I’ve spent an entire career selling an intangible. This requires the ability to demonstrate value.

Here are 2 reasons a provider can easily justify a rate increase:

  1. They invest in their service offering in order to provide increased value to customers
  2. They preserve rate integrity, which can help to preserve value within the industry

Stagnation is death in business. I’d challenge anyone who tells me that their business, regardless of vertical, hasn’t changed significantly in the past 5 years. And, if it hasn’t, surely the environment around them has changed.

The need to stay current and evolve in business is constant and expensive. Research and development into new technologies, consumer habits, competitive threats, greater efficiencies, automation where feasible – these all cost money. But they enable businesses to provide better and more effective solutions to their customers. Someone has to pay for that.

As to the other concept – preserving value within an industry category – this one is far less tangible. Some people aren’t going to agree with me on this one. Much has been written about the members of the radio industry being their own worst enemy. Fear of change, increased consumer choice, increased competition, new delivery systems for entertainment, ever more consolidation, and reduced transactional business inflowing all contribute to this phenomenon. Not to mention, the pervasive small minded approach that the radio competitor down the street is the enemy, rather than, say, the growth of digital media. This thinking prevents operators in my industry to collaborate rather than take a divided-we-fall approach.

This same narrow thinking contributes to a pattern to lower the floor on price. That’s a slippery slope. Where exactly does that lead?

Just like you can’t cut your way to growth, as it relates to controlling costs, you cannot grow revenues while continuing to lower your rates. It’s a risk you take to raise your rate, but when ever was a solution sale a One Size Fits All? It’s not and never was.



About Melanie M. Morris
Broker of Trust and Authenticity I'm really a sales executive, but I'd rather identify with these ideals rather than to simply say...I'm a seller.

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