Mark Walker, JM Walker Group

I was once privileged to be a part of a wonderful "time management" training company. I became an expert on our program and process, to be able to sell and deliver the training to my clients. We were among the first in the US to offer training using an organizer notebook.

COMMODITIZATION. Over the years, as competitors entered the market, our program became commoditized. Prospects tended to assume all time management programs were the same, so they became more focused on price. It became more difficult to gain new clients, and more challenging to expand business within existing clients.

We looked at our offerings from our clients' perspectives. Here are some of the ways we dealt with commoditization.

1. After talking with our larger clients, we gave them the option of becoming certified to deliver our workshop themselves in their own organizations. We developed a "train the trainer" program to teach the talented staff already resident in their corporate training departments to do what we did. This reduced their cost per person by almost half, and enabled them a measure of customization for their culture. We customized their organizers. It also made it more difficult for them to change to a competitor.
   
2. We took the workshops on the road, offering them as "open sessions" to prospects and clients in major cities around the country. This gave us the opportunity for low risk evaluations of our program by prospects, and to keep people engaged who were already clients. We developed small clients whom we would otherwise not have been able to serve, and who offered us the opportunity to earn a higher margin.
   
3. We offered "free refresher" training. It was totally free for former graduates who wanted a "tune-up." Our cost was only the cup of coffee they consumed.

PRICE PRESSURES. Our training consultants had significant pricing discretion. But I did not "discount." If a client insisted on a lower price I:

1. Give them more of me. I looked for something of value that I could provide at no additional charge that increased the value of my program to the client, justifying the price. An example: a "free" seminar for executives and their assistants to discuss ways to better coordinate calendars and to reduce the numbers of interruptions the executive experienced. I was there anyway, conducting the half day training for everyone else, so adding another two hours was not costly for me.
   
2. Reduce my costs in the "package." This enabled lowering of the price without damaging margin or quality. Our program (before notebook computers and PDA's proliferated) included an organizer notebook, which we taught clients to use. The standard package included a six month supply of materials. For one major account we reduced that to two months. For another client, we supplied a less expensive binder, which the workshop participants could "trade in" and pay the difference for a better binder. In each case, I met their price without dropping margin, and retained the client.

The business was eventually sold to a much larger training company, and in the process we learned that for the 11 year life of the business, I was the person with the highest margin contribution.

Summary. Look for ways to meet your customer's needs by finding out what they want that your competition does not do. Reduce your costs to reduce the price and still maintain profit margins.