#46: Losing to Cheaper Competitors? You’re Selling the Wrong Thing.

Chip Royce, Flywheel Advisors

You have the better product, but they have the lower price.
Here’s how to stop fighting on their terms and start winning on yours.

I had a client, a CEO at a sharp B2B SaaS company, who was just gutted. His team had lost another deal to a competitor that was, frankly, worse. The product was clunky, the support was slow, but they were cheaper.

“They loved the demo,” he told me. “They saw all the features. I don’t get it.”

This isn’t an uncommon story. It’s a special kind of frustrating to have a better product and still lose. You know you’re the superior choice, but prospects are signing with the other guys anyway. The reason is simple, but fixing it isn’t. Your product is losing because you’re playing a game of feature-for-feature comparison. That’s a game that always ends with a discussion about price.

The Wrong Reflexes in a Price Fight

When leaders get backed into this corner, I’ve seen them make a few common mistakes.

First, they blame the sales team. They tell them to “sell harder” or “improve their closing skills.” This completely misses the point. The sales team is fighting with one hand tied behind their back because the conversation is flawed from the start.

Second, they bloat the product roadmap. The logic feels right: more features must equal more value. But it doesn’t. It just adds more noise to the sales pitch and makes your product look even more like a commodity. You are just adding more items to a checklist for them to compare.

Third, they offer a discount. This is the most dangerous one. It might save a single deal, but it poisons the well for every negotiation that follows. You’ve just taught your customers that your price isn’t real.

These are just symptoms. The actual disease is the feature-selling trap.

Diagnosis: Product Commoditization via Feature-Selling

The feature-selling trap is what happens when you try to be everything to everyone. Your go-to-market message becomes a generic list of capabilities. This is the very definition of product commoditization. Your unique, innovative solution accidentally becomes an interchangeable good.

And when that happens, price is the only thing left to talk about.

Think about it like this. If you sell a hammer, and your competitor sells a hammer, the buyer will pick the cheaper one. It makes perfect sense. But what if you sell a “roof-framing system for commercial construction”? You’re no longer selling just a hammer. You are selling a very specific solution to a specific problem for a specific buyer. You’ve changed the conversation from price to value.

Here are the signs that you are stuck selling features:

• Every sales conversation eventually finds its way back to price.
• Prospects tell you “we need to think about it,” even after a demo they claimed to love.
• Your sales cycle feels long, winding, and completely unpredictable.
• You are consistently losing deals to cheaper competitors who you know are inferior.

If this checklist feels a little too familiar, it’s time to change your approach.

The Cure: How to Compete on Value, Not Price

The only way out of this mess is to stop selling a horizontal, feature-based product and start selling a specific solution. This is the core of feature selling vs value selling. It’s a strategic shift, not a sales tactic.

It means you have to:

• Figure out which of your customer segments are the most profitable.
• Build a unique go-to-market plan for each of them.
• Create the internal operations to sustain that focused growth.

I worked with a data analytics company that had this exact problem. Their platform was powerful, but they were marketing it as a generic tool. They were losing deals left and right to cheaper, less capable competitors.

We helped them zero in on their best segment: mid-sized manufacturing companies. Then, we built everything around that focus. We remade everything, including the website, sales materials, and pricing model, to speak directly to the problems a manufacturing leader faces.

The results speak for themselves. They raised their prices by 25% and their win rate jumped by 50%. They weren’t in price wars anymore. They were competing on tangible value.

Shifting the Conversation From “What” to “Why”

So, how to justify a higher price for a premium product? You have to fundamentally change the conversation.

The feature-selling approach is all about the “what.” It sounds like this: “Our product has X, Y, and Z features.” The message is that you’re better because you have more capabilities. The demo is the centerpiece.

The value-selling approach is about the “why.” It’s customer-centric. It starts by diagnosing the prospect’s pain points and sounds more like this: “I hear you’re struggling with A, B, and C. Our solution helps you fix that and get these specific results.” The goal isn’t to show off your product. The goal is to see if you can help their business succeed.

Let’s use a real example. A company selling a project management tool could say: “Our tool has Gantt charts, Kanban boards, and time tracking.” (Feature selling)

Or they could say: “You’re struggling to keep projects on schedule and on budget. Our tool helps you see your timeline clearly, spot bottlenecks before they become disasters, and track your team’s progress. You can deliver on time and under budget.” (Value selling)

The first one is about their product. The second one is about the customer’s success. It’s a small shift in words, but it’s a massive shift in perspective.

It’s Time to Stop Competing on Price

If these symptoms sound familiar, the first step is a clear diagnosis. I’ve developed a tool to help you see exactly how the feature-selling trap is impacting your revenue.

Use our proprietary 2-Minute B2B Diagnostic to:

• Identify the hidden vulnerabilities in your go-to-market strategy.
• Uncover untapped potential in your customer base.
• Get a clear, actionable plan to escape the feature-selling trap.

Don’t let your better product lose another deal. Take the audit. Find out where you really stand.