THE GROWTH BARRIER SERIES

Stop Competing on Price

How to identify and communicate the value that makes price a secondary conversation.

By David Behney  |  Founder, Behney Management Strategies

I had a conversation with a business owner last spring who told me she lost a big contract to a competitor who came in 20 percent cheaper. She was frustrated, and I understood why. She’d put together a strong proposal, had a track record with the client, and knew she could deliver better work.

I asked her what the competitor’s pitch looked like. She said she didn’t know the details, but she assumed it was basically the same scope at a lower price. Then I asked a harder question: “what did your proposal say about why you’re worth 20 percent more?”

She paused. The honest answer was that it didn’t say much. Her proposal listed the services, the timeline, and the cost. It looked almost identical to what any competitor would submit. The only meaningful difference was the number at the bottom of the page.

When your proposal looks the same as everyone else’s, price becomes the only differentiator. And when price is the differentiator, you will always lose to someone willing to charge less.

The Commodity Trap

Most small businesses fall into the commodity trap without realizing it. They know their work is better. Their clients tell them so. But their marketing, their proposals, and their sales conversations don’t reflect that difference in any tangible way.

A commodity is something the buyer perceives as interchangeable. Gasoline is a commodity. Bulk lumber is a commodity. When you’re treated like a commodity, the buyer’s only rational move is to pick the cheapest option. Why pay more for something identical?

The way out of the commodity trap isn’t to lower your prices to match. We covered that in March, and the math doesn’t work. The way out is to make it clear, in every client interaction, that what you offer is not identical. That the experience, the outcome, and the relationship are fundamentally different from what the cheaper option provides.

What Your Best Clients Actually Value

Here’s an exercise that changes the way owners think about their business. Pick your three best clients. Not the biggest in terms of revenue, but the ones who are the best fit. The ones who pay on time, respect your expertise, refer you to others, and rarely complain about price.

Now ask yourself: why do they stay? What is it about working with you that keeps them around?

The answers are almost never about price. They’re about trust, reliability, responsiveness, expertise, and the peace of mind that comes from knowing the job will get done right. Those are the things your best clients are paying for. Price is just the mechanism.

The problem is that most owners never articulate those things explicitly. They assume clients already know. But new prospects don’t know. And when those prospects are comparing your proposal to a cheaper alternative, they’re deciding with incomplete information. Your job is to fill in the gaps.

Building a Value Proposition That Works

A value proposition is a clear statement of what you do, who you do it for, and why it matters. It’s not a tagline or a mission statement. It’s the core message that runs through everything your business communicates.

Most small business value propositions sound the same. “We provide high-quality service with a personal touch.” That could be any business in any industry. It tells the prospect nothing about why you’re different or why your difference matters to them.

A strong value proposition answers three specific questions.

1. What outcome do you deliver?
   Not what service you perform, but what result the client gets. A dental practice doesn’t sell cleanings. It sells a healthy smile and the confidence that comes with it. A construction company doesn’t sell labor hours. It delivers a finished project on time and on budget. Frame everything around what the client walks away with.
2. What problem do you solve that others don’t?
   Every business has something it does better or differently than the competition. Maybe you specialize in a niche that gives you deeper expertise. Maybe your process eliminates common headaches that clients have experienced with other providers. Maybe your team’s responsiveness means the client never has to chase you for updates. Identify the pain point you eliminate that others can’t or don’t.
3. What’s the cost of not choosing you?
   This is where it gets powerful. If a prospect goes with the cheaper option and the project runs late, what does that cost them? If the quality is lower, what’s the impact on their business or their customers? If the communication is poor, how much of their time gets eaten up managing the vendor? The true cost of the cheaper option is almost never just the price on the quote.

Putting Value into Practice

Knowing your value proposition is one thing. Embedding it into how you operate is another. Here are four places where the shift from price to value shows up in practice.

Your proposals. Stop submitting documents that look like a price list with a cover page. A proposal should tell a story: here’s what we understand about your situation, here’s our approach, here’s what you can expect, and here’s what sets us apart. The price should be the last thing they see, not the first. By the time they get to the number, they should already understand why it’s worth it.

Your initial conversations. When a prospect asks “what do you charge?” early in the conversation, resist the urge to answer immediately. Instead, ask questions. What are they trying to accomplish? What’s gone wrong with previous providers? What does success look like for them? The more you understand their situation before discussing price, the better you can frame your solution in terms that matter to them.

Your client experience. Value isn’t just about what you say. It’s about what you do. The businesses that command premium pricing deliver an experience that justifies it. That means proactive communication, meeting deadlines consistently, anticipating problems before they happen, and treating every interaction as a chance to reinforce that the client made the right choice.

Your referral conversations. Your best source of new business is referrals from existing clients. But most referrals sound like “you should call my guy.” That’s warm, but it’s vague. If your clients can articulate your value clearly, because you’ve communicated it clearly to them, their referrals carry more weight. Give your clients the language to describe what you do and why it matters. Make it easy for them to sell you.

The Right Clients at the Right Price

There’s a direct connection between this topic and everything else we’ve covered in the series. When you stop competing on price, your margins improve (March). Better margins fund better hires (May) and stronger cash flow (June). The right clients are easier to serve, which reduces the owner’s operational burden (January). And the confidence that comes from knowing your value makes 90-day planning (April) feel like progress instead of survival.

The businesses that grow sustainably aren’t the cheapest option in their market. They’re the ones that have figured out what they’re worth, learned how to communicate it, and built a client base that agrees.

That’s not a marketing trick. It’s a business strategy. And it starts with the decision to stop letting price be the conversation and start making value the conversation instead.

Next month in the “Growth Barrier Series,” we’ll tackle what happens when a business tries to scale before it has the operational foundation to support it. Because growth without systems just creates expensive chaos.

Stuck competing on price?

Behney Management Strategies helps small business owners reposition their offerings around value, not cost. Our Discovery engagement uncovers what your best clients value, where your messaging falls short, and how to build a sales approach that protects your margins while attracting better work.

SMALL BUSINESS. BIG GOALS.

WRITTEN BY

David Behney, Founder & CEO

David Behney is the Founder and CEO of Behney Management Strategies, where he helps small businesses achieve their big goals through expert C-suite consulting. With a background in fractional CFO services, David now provides strategic guidance across finance, operations, marketing, and technology to businesses with $1M–$30M in revenue. Passionate about driving growth and sustainability, he partners with business leaders to build strong foundations and navigate challenges. Connect with David to take your business to the next level.