It’s accepted as a common economic fact: demand is what ultimately determines the price of things. Oddly enough, this is not just a reality you’ll learn to appreciate in an elementary, highschool, or even a college classroom. It’s something everyone is bound to realize.
Therefore, if you’re still trying to generate IT leads via constant pricing wars, your expertise could very well be behind everyone else’s!
But first of all, it’s easy to feel intimidated from understanding the economic role of demand. It affects so many things other than just the price of products (as evidenced over the recent investment hoohah over Apple). Do you got to be a Wall Street veteran with a Harvard degree just to get it perfectly?
The good news is perfect isn’t always so necessary. A rough idea on the psychological factors behind demand is enough for the average marketer.
- Access to information – It’s presumed that many B2B prospects access plenty of information long before they even talk to a sales rep (yes, even your own). That means even if a prospect is a qualified lead, you’ve got to see how much they already know. They could be already sold and are just waiting to sign or they feel that information was scarce. In the case of the latter, expertise is obviously critical to winning the business.
- Estimates on supply – One more thing you need to know is how they estimate a product/services’ availability. Sometimes they could estimate wrong, sometimes they’re right. More importantly however is how seriously they see it as a scarcity. For example, you have the advantage when a prospect can’t seem to find any other prospect who can finish a particular IT project as quickly as you can. If time is more valuable than money, you can expect price to be less of an issue.
- Alternatives to your value proposition – Finally, perhaps your biggest contender comes in the form of products that could serve as alternatives to yours. Oil for example is facing fluctuations in its pricing possibly because of more fuel efficiency as well as oil production in other countries. You could look at the typical examples of shoppers looking up items online but only buying at the nearest retailer (and vice-versa).
Although, what’s driving all the above are really the desires for ownership of a product and its utility. This is logically the heart of demand and why people are basically willing to pay for what they want. (In this case, it’s anything that will make an easier day at work.)