DLAB Branding Atelier
A reflection on why price pressure is not a price problem, and what it has to do with the way a company is counted.
There is a conversation that appears in almost every diagnosis we make. The customer – manager or owner of an industrial SME – explains how the market is becoming more and more expensive in price. How margins are narrowing. How customers compare, ask for discounts, threaten to go to a cheaper competitor.
And at some point in that conversation, the phrase usually comes up: "But we do things well. We are better."
We all say it. The difference is in whether the market knows it—and if it does, it believes it.
Because price pressure, in most of the cases we see, is not a price problem. It is a problem of perception. And perception doesn't just depend on what you do: it depends on how you tell it, how clearly you convey it, and how consistently it is perceived at every touchpoint with your customer.
When a company has not worked on its brand, something predictable happens: the customer does not have enough elements to value it in any other way than the price. Not because I'm clumsy. But because no one has given him the arguments. No one has told him, with precision and conviction, what makes that company different. And when in doubt, the human brain looks for the simplest criterion available: the number.
Discounting, in this context, is not a commercial tactic. It is the symptom of something that has not been solved before: the difference between what the company is capable of doing and what the customer perceives it can give them.
And here is the data that is rarely put on the balance sheet: each discount has a direct cost, which appears in the margin, and an invisible cost, which does not appear in any report. The invisible cost is the signal that this discount sends to the market: that the price was negotiable, that the value was not so solid, that next time it is also worth trying.
Working on a company's brand is not putting a beautiful photo on the web. It is to build the conditions so that price is never the only argument. Sort out what you do, how you do it, and why it matters. Make it visible, verifiable and consistent everywhere the customer finds you.
That doesn't eliminate price competition. But it changes the conversation. And when the conversation changes, the margin changes.
If tomorrow a customer told you that they were going to change you for someone cheaper, what would you tell them?
Do you have that answer clear, and is it somewhere where he might have found it before?
