Understanding the Value of Pricing: Lessons and Insights from #USAMfgHour

When it comes to pricing products and services, striking the right balance between affordability and quality can be challenging. As English writer and social thinker John Ruskin once said, “The common law of business balance prohibits paying a little and getting a lot — it can’t be done.” 

Recently, Kirsten Austin of DCSC, Inc., a company that helps distribution and manufacturing companies with ERP, shipping, and supply chain solutions, led a #USAMfgHour chat on X about this very topic. Participants shared their experiences and strategies for setting fair prices, managing competition, and emphasizing the true value of their offerings to customers. Together, they explored how pricing decisions impact reputation, customer trust, and long-term success.

 

The Value of Pricing

The chat began with an introduction of sorts to set up the rest of the conversation about pricing and sales. Participants shared the products or services their company specializes in and sells

“Keystone Click is a digital marketing agency that provides custom digital marketing solutions, powered by data, to drive your business forward,” answered Whitney Koch from Keystone Click. “Our services include digital marketing, research & strategy, marketing automation, website design, and more!”

“We offer Social Media Content Management Packages, SEO Article Writing Services & Done-For-You Social Media Posts for SME B2B, Tech, and Manufacturing companies,” Ruby Rusine from Social Success Marketing said. 

Nigel Packer from PelaTis Online describes his service thusly: “Better communications with your online customers, creating a relationship that brings a lifetime of sales.” 

“We sell a service, and through that service, the product of #RealEstate,” responded Steve Chin from Steve and April. “Our service is to advise and guide our clients through the real estate buying/selling process with our experience, expertise, and training, so they can make informed decisions.”

DCSC Inc., of which host Austin is the President and CEO, sells Enterprise Resource Planning (ERP), Warehouse Management Systems (WMS), and Shipping software to manufacturers and distributors. In addition, the company has developed DCWarehouse Automation®, a WMS Solution that streamlines operations with real-time visibility and automation.

 

Are Your Products or Services Reasonably Priced?

Participants were then asked if they felt their products or services are reasonably priced.

“I feel that our service is priced reasonably,” Chin answered, adding: “Sometimes we get a client that doesn’t think so, but they see the dividends later, especially in a rising market. Or if they are buying income property and see the value we bring.”

“Our pricing is comparable to other agencies,” said Koch.

“Our prices reflect the quality, knowledge and experience of our team, giving our clients confidence in the results,” Packer clarified. 

“Yes, very much affordable for SMEs,” declared Rusine. “We ensure our pricing provides great value without compromising on quality!”

Host Austin noted that DCSC, Inc. does not price their products low but notes why she feels a higher price is warranted.

“In our case, we are not the cheapest WMS or shipping solution, but our product has many features and benefits. So, we feel we offer a very fair price for the value we offer coupled with our experience,” Austin said.

 

Competing on Value, Not Price

Determining appropriate pricing to ensure profitability can be tricky, and competitor pricing can make it even trickier. Host Austin presented participants with this scenario: Your competition is undercutting your price. What is the most important thing for you to do?

“Definitely don’t react by slashing your own pricing!” Koch exclaimed.

“ABSOLUTELY!” host Austin replied, validating Koch’s response. “That’s not good for business.”

“It is harder to raise prices than it is to lower them,” Packer added.

“If your competition is undercutting your prices, the most important thing to do is focus on value rather than price,” declared Rusine. “Highlight the superior quality of your products or services and emphasize excellent customer service to build loyalty. Instead of engaging in a price war, differentiate your brand by showcasing what makes it unique and valuable to customers. P.S. I would also include longevity in the field like what you are [saying] in your image or posts ‘30 years young.’  It speaks about reliability, stability and expertise. (20 years young here in social.)”

Image Rusine was referring to in her response. Note “30 YEARS YOUNG!” in the bottom right corner.

“ABSOLUTELY! You are On Point! 🎯” host Austin praised Rusine.

“When we go to listing appointments, we sell our clients on the service we provide and explain our value and how that benefits them,” commented Chin. “Usually we know enough of (sic) our competition we can explain away what they’re missing with the ‘discount’ companies.”

Rusine replied to Chin: “I love what you said about the competition, Steve.”

“If you’re in the market long enough, you get to know how your competition operates, what people (other agents and potential clients) say about them,” Chin responded to Rusine. “Sometimes we even win over their former clients. “

“If I am not chosen to do the work I always ask the potential client why,” said Packer. “If they say a cheaper competitor won the work then I thank them. I contact them after a few months and ask how they are getting on. I have won a number of contracts this way.”

According to host Austin, “The most important thing to do in a sales cycle is to understand your buyer and create a meaningful relationship. Customers should never feel a ploy or gimmick has sold them.”

She then recommended participants read “Mapping the B2B Customer Journey to Unlock Success,” the recap of a previous #USAMfgHour chat hosted by Packer about customer touchpoints.

 

The Power of Customer References and Case Studies

Next, host Austin shifted the conversation to reputation management, asking why customer references and case studies are important.

“It does build trust and credibility with potential buyers,” Rusine said. “Also, customer references and case studies are crucial because they demonstrate real-world success. They showcase how your product or service effectively solved specific problems for actual customers, providing tangible evidence of value.”

“What @SocialSMktg said!” marketing strategist Joanie Hollabaugh emphasized. “Plus, they are perceived as ‘authentic’ and less ‘markety.’”

“It gives our potential customers a way to personally verify our qualifications by contacting our past clients,” responded Chin. “Anything to make our clients feel more at ease with us & our services. Especially as #realestate is usually someone’s single largest investment.”

“Build reputation and credibility,” stated Rick Gunnarson from DCSC, Inc.

“Both are gold standards of your work and skills,” Packer said, adding: “Case studies are the stories that help potential customers recognise themselves and their need for your products or services. Testimonials are the currency that buy new customers.”

“They are proof that you know how to do what you say you can do…and that the prospective customer won’t be your first customer,” Koch said.

Host Austin distilled these responses down into this simple statement: “If a customer is going to invest with you, it’s essential for them to know that there are happy clients who can share their experience with your company.” 

Then, host Austin shared “Methods for Making Effective Industrial Case Studies,” a recap of the #USAMfgHour “Case Studies: How They Are Used and Where They Are Shared” hosted by Paul Kiesche from Aviate Creative.

 

Building Relationships Before the Sale

A key aspect of sales, brand reputation and loyalty is relationship building. Host Austin asked participants to name why building a relationship before a sale is so important.

“To start, it’s how to discover pain points and needs for finding solutions,” Gunnarson said. “Also, demonstrates genuine care for helping them address their needs.”

“You are so smart Rick, whoever you work for sure must be lucky!” Austin said in affirmation. “Oh, that’s right it’s us!”

“Building a relationship is building your K-L-T Factor,” stated Koch. “People like to buy from people they know, like, and trust.”

“Exactly Whitney!” host Austin exclaimed in response.

“Building relationships before a sale helps create trust and understanding,” Rusine explained. “It makes it easier to find the right solutions and keeps the sales process smooth. Plus, strong connections often lead to referrals and repeat customers!”

“Nailed it, Ruby!” proclaimed Hollabaugh.

“Easier to sell to a ‘warm’ audience,” Rusine replied.

“People want to buy when they feel like they made their educated decision. No one likes a pushy saleswoman,” host Austin added to the comment thread.

“Totally!” Rusine agreed with host Austin. “I cringe when salespeople are too pushy, so I definitely don’t want to come off that way to anyone who reaches out for my services.”

“We need to establish a relationship, a rapport with our clients to see what they actually need (that they might not be outright saying…) and gain their trust before they make the hefty commitment to buy/sell,” explained Chin.

“People buy from people,” Packer asserted. “When a potential customer is buying a big ticket item/service, the customer needs to know they are in safe hands. You only get that by building a relationship that demonstrates you are a safe pair of hands.” 

Host Austin succinctly summarized participants’ responses, noting: “When you build a genuine relationship with your prospect, you can understand the ROI they need to justify the purchase and demonstrate it.”

 

When Price Isn’t the Only Factor in a Sale

Bringing the conversation back to pricing, host Austin asked participants whether they would consider a deal lost solely on price a good opportunity lost.

“I call TRICK QUESTION!” proclaimed Gunnarson. “Losing a deal solely to price shows the sale process may have had an error: didn’t find pain point? Didn’t find true need? They doubt the ability of your company to execute the pull-through and onboarding?”

Amy Anderson responded to Gunnarson with a different take: “Sometimes, the customer is the one with the monetary pain point. When the acceptable price no longer permits a profit (even a small one), the customer has become your pain point… Pricing is a dance that needs all to feel satisfied with the deal.”

“Losing based on price can say a lot about the prospect,” reasoned Koch. “In most cases, it is probably for the best. And as @NigelTPacker and @SteveAndApril1 have said, they can potentially come back to you after they realize what the lowest price got them.”

“No one likes to lose a sale but in the end, it may be good for you in the long run,” host Austin confirmed.

“Not necessarily,” posited Rusine. “Losing a deal solely due to price doesn’t always mean you’ve lost a good opportunity. It could be because of a value mismatch. If the client only focuses on price, they may not fully appreciate the value we offer. We learn and move on.”

“Knowing your value (your product’s value) is part of the expertise/quality you offer,” Anderson confirmed. “The right customers will appreciate it.”

“Depends on the situation,” Chin reasoned. “Sometimes if we lose out but were very close, we might think we lost out on a good opportunity. But most of the time we just have to learn from our mistakes and move ahead with that knowledge and adjustments.”

“Absolutely Steve!” host Austin agreed.

“If we lose a project on price, we recognise that the client was focused on price, not value,” remarked Packer. “We do not compromise on the value that we deliver.”

“You’re darn right!” confirmed host Austin. “In business or in personal life too.”

“Great point!” Gunnarson added.

Losing based on price is not a black-and-white situation that puts buyers in the wrong. Host Austin noted, “lower-level products and services may make sense for buyers. They may offer them a foot in the door to what you sell. Sometimes, the very best customers are the ones who learn what they do not like in a lower-level product or service.”

 

Learning from Regrettable Purchases

To round out the conversation on pricing and bring the chat to a close, host Austin Austin asked participants whether they ever made a purchase based on lower pricing and then regretted their decision.

“I can’t think of a price example, but there have been some home purchases that I’ve regretted because I learned well after that my husband and I did not do a thorough enough job in vetting service providers,” lamented Koch.

“I definitely did that too,” sympathized host Austin. “In fact, I am not really happy with a new roof I just got. They’re fixing it. Actually as we speak.”

“Yep! Honestly, shame on me,” Rusine chided herself.

“Happens to the best of us, Ruby!” Koch said in consolation.

To preface his answer, Packer provided these statistics: “When purchasing, 10% buy because it is the lowest price. 10% buy because it is the most expensive. That leaves 80% who buy based on their perception of value for money.”

Though Packer admitted to having bought something based on its lower price, he added: I only needed the tool for one job. Don’t be the cheapest it comes with many problems.”

“Yeah…There’s a reason it’s so heavily discounted…🤢🤮,” said Chin, adding a picture of the microwavable chicken marsala meal he was referring to.

“One time, I bought a wicker patio set that seemed to get good reviews,” began host Austin. “In truth, it was shipped from Asia, and the materials were so poor that it was not worth putting it together. To ship it back would have cost more than what I paid for the set, lesson learned.”

 

In Review

This #USAMfgHour discussion offered valuable insights into the delicate art of pricing. Participants emphasized the importance of focusing on quality and value, building relationships with customers, and using testimonials to reinforce credibility. By understanding that the best customers appreciate value over price alone, businesses can strengthen their reputation and foster loyalty, ensuring sustainable growth in a competitive marketplace.

 

About #USAMfgHour

Anyone who champions U.S. manufacturing can join in on a new conversation each week on Twitter using the hashtag #USAMfgHour. The chat starts at 11 a.m. Pacific Standard Time/2 p.m. Eastern. Share positive blog posts, helpful articles, news, important information, accomplishments, events, and more with other manufacturers and supporters from throughout the country.

Are you interested in hosting a #USAMfgHour chat? Contact organizers @DCSCinc, @SocialSMktg, and @KeystoneClick.

To learn more about how Keystone Click can help you level up your online presence, contact us.