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The Art of Pricing

The cheapest solution isn’t always the best

By Liz Richards, Executive Vice President, MHEDA

I love the story about the barber who faced a dilemma when a competitor moved across the street and posted a neon sign offering haircuts for $5. The barber, who was accustomed to charging $20 for a cut, pondered what to do. Should he lower his price to match the competitor’s offer? What would be the impact of such a reduced price? How much volume would be needed to protect his profit? And the most important question of all: Weren’t his haircuts worth more than $5? He did the sensible thing and retaliated with a sign of his own: “We Fix $5 Haircuts.”

The lesson here is so fitting in today’s marketplace. It seems the focus today is on lower prices, but as we all know, cheaper is generally not better and rarely equals value. In fact, cheaper is oftentimes, much, much worse than paying a higher price and getting a higher quality solution.

As consumers, we have all been guilty of driving this quest for a lower price. In a commodity market, it’s tough to argue against buying for less, but when it comes to a product or service requiring skilled expertise, price should never be the primary consideration and it is to everyone’s advantage in this industry to convey this message to the end user.

During the recent MHEDA Convention, attendees heard from two outstanding speakers on the subject of selling. Warren Greshes shared the specific attitudes and skill sets needed to differentiate your solution from the competition and create the kind of value to compete and succeed in today’s economy. And Norm Clark, Senior Lecturer from Texas A&M, presented information on how to engage customers and prospects in order to best meet the customer’s need, and hence offer a solution based on desired objectives, not on price. Later this year, MHEDA is offering an industry specific conference, Selling Strategies for the Material Handling Professional, on November 7-8, in Rosemont, Illinois. This is an ideal program for professionals who are interested in bringing their sales skills to the next level, and particularly valuable for the younger associate who may be new to the sales profession or new to the industry.

Speaking of the younger professional, on page 32 of this issue, you will read about how some MHEDA members are working with interns in their organizations. What better way to groom a prospective employee than to hire an eager, enthusiastic college student and train them from the ground up? Not sure how to structure an internship in your organization? Go to the “Careers” tab on the MHEDA website, www.mheda. org/career, and view the “Structuring Effective Internships” webinar.

We are also pleased to be offering an Emerging Leaders Conference this summer on August 1. This fast-paced, one-day conference is being held in Chicago and co-sponsored with MHI and will include topics on personal leadership, time management, conflict resolution, coaching and more. Check it out!

Thank you to everyone who attended the MHEDA Convention. It was our sincere pleasure to serve you and although it is not “cheap” to attend a MHEDA Convention, we are confident you came away with great value for the time and dollars invested. I’d love to hear from you. You can reach me anytime at the MHEDA office by phone at 847-680-3500, or by emailing me at lrichards@mheda.org.

 

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