“We’re sick of getting undercut by the nationals!”
I was recently speaking with a client that’s having a real issue with several VERY aggressive competitors. No matter what mark-up they set, the competition is coming in 2 to 5 percent lower.
In response, this company has been aggressively working to sell their value and demonstrate their superior quality. But despite their best efforts, the overwhelming response has been “sure, that sounds great, but can you match the other guy’s price?”
With the downturn in the staffing industry in 2009, margins have taken a hit, especially for low skill positions. And while the market for staffing is improving, selling value has become more difficult than ever. So what can you do about it?
Why margins are suffering…but there ARE solutions!
Why won’t people pay more for better service? The answer is fairly simple. The people you’re selling to either don’t believe–or don’t care about the value you can offer. They may not believe your promises because they’ve been burned so many times before, and they just don’t believe any staffing sales rep.
The bigger issue is that they just don’t care. Sure you can deliver better talent. And more reliable service. But that’s not what they are paid to buy. Their incentive is to get the jobs filled at the lowest cost. Period.
So what’s the solution?
While there are no magic answers, here are three strategies you could try.
- Sell to the people who care about quality. Get the the supervisors and department heads that need more reliable staffing. Or sell senior executives on the ROI of quality staffing.
- Find new problems to solve. If you’re selling commodity services, you can’t get premium prices. To increase margins, look for clients with unresolved staffing problems, then create unique solutions for those firms.
- Focus on hard to fill positions. In your market, what positions are most difficult to fill? Build your recruiting strengths for these positions then become a specialist at sourcing talent for those jobs.
These three ideas certainly are not the only strategies for overcoming the price objection, but I hope they’ll give you a starting point. The bottom line is that if you want to overcome the price objection, just selling your value won’t work. You need a new strategy. You may need to focus on new clients and new decision makers. And you’re going to need a new approach to sales and marketing.
For more ideas, here are two past articles Haley Marketing has written:
And if you have any other strategies you can suggest, please share your experiences!